Question

In its financial statements, Pulham Corp. uses the equity method of accounting for its 30% ownership of Angles Corp. At December 31, Year 2, Pulham has a receivable from Angles. How should the receivable be reported in Pulham's Year 2 financial statements

Answer 1

The receivable be reported in Pulham's Year 2 financial statements as: The total receivable should be disclosed separately.

What is receivable?

Receivable is the money a company is yet to receive or  is expected to receive from their clients or customers for service they render to their client.

Since at the end of December 31, Year 2, Pulham has a receivable from Angles therefore the total receivable should be recorded and disclosed separately in Pulham's Year 2 financial statements.

Inconclusion the total receivable should be disclosed separately.

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