Question

Jarmon Company owns twenty-three percent (23%) of the voting common stock of Kaleski Corp. Jarmon does not have the ability to exercise significant influence over the operations of Kaleski. What method should Jarmon use to account for its investment in Kaleski

Answer 1

Answer: Cost method

Step-by-step explanation:

The method that Jarmon should use to account for its investment in Kaleski is the cost method.

Since it's a cost method, Kaleski should record the investment in stocks at cost, that is the price that was paid for the stock. In this case, most stocks from the other investors are purchased through the brokers.