When you add the “Investment in XYZ” on the asset side of the balance sheet of the investor, where do you adjust the Debt/Equity side for the increase to balance? I assume it is the Retained Earnings being adjusted, but I could not find it in the book. Can anyone confirm this? Thanks C.
Can someone help me out with this one please? C.
Wouldn’t current assets (cash) just decrease by the amount of the investment in XYZ? Aren’t you just exchaning one asset (cash) for another (XYZ)?
You know, you might just be on to something there! Of course that is the answer, I apologize for asking a dumb question, cause I should’ve been able to spot that one myself… Thanks for putting me straight, c.