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Posted: October 15th, 2022

King Saud University ACCOUNTING ACCT 457 On August 1, 2013, Abruzzo Corp. acquired 10,000 of the outstanding shares

On August 1, 2013, Abruzzo Corp. acquired 10,000 of the outstanding shares of Tuscany Co. On January 2, 2014, Abruzzo acquired an additional 20,000 shares of Tuscany Co., which brought the total ownership to 30,000 shares. Using the normal guidelines for percentages of ownership and assuming that Tuscany Co. had 100,000 shares outstanding during 2013 and 2014, Abruzzo Corp. should account for the investment in Tuscany Co. by using thecost method in 2013 and the equity method in 2014.cost method in 2013, retroactively adjusting the investment account to the equity method at the beginning of 2014, and using the equity method in 2014.equity method for 2013 and 2014.cost method in 2013 and 2014 for the 10,000 shares acquired in 2013, and using the equity method in 2014 for the 20,000 shares acquired in 2014.

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