Dewey Inc. owns 64% of Felicity Corporation's outstanding voting stock. Dewey should account for its investment in Felicity using :

Question

Quizplus · Accepted Answer

Because Dewey owns more than 50% of Felicity's voting stock, it has a controlling interest and should therefore prepare consolidated financial statements. This means that Dewey should combine its own financial statements with those of Felicity and report the results as if the two companies were a single entity. The fair value, cost, and mark-to-market methods are not appropriate for accounting for investments in subsidiaries that are controlled by the investor.

Dewey Inc Owns 64% of Felicity Corporation's Outstanding Voting Stock