Assignment: Client Memo
You are an intern in a CPA firm. Your manager walks into your cubicle and says, "One of our clients is thinking about investing in a company. He wants to know how he should account for this investment. Be prepared to discuss it with the client tomorrow."
Write a memo to your manager giving your thoughts on how this should be handled by the client.
The situation is the following:
a) Company F purchased 40% of the outstanding stock of company K on June 30, 20XX.
b) Both of the companies have a December 31st, year end.
c) Company K is a publicly traded company and reports its net income to company F.
d) Company K also pays a hefty dividend to the shareholders of company F.
e) How should company F report the above facts on its December 31, 20XX balance sheet and income statement?
Format your assignment according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.