A Company buys votingcommon stock in B Company as an investment.Briefly explain /discuss how A's income from its investment in B wouldbe reported on the income statement using the...

Cost Method: When any company does investment into another company which is below 20% of
the total number of shares outstanding for investee company, the investment is recognized under the
cost method. This method is also known by the name of initial value method also because the
investment amount remains at its fair value as determined at the time of acquisition. As the
investment is not significant the investing company does not have significant influence over the
operations of the investee company. Income earned by the investee company is recognized by the
investor company in proportionate to its share, under the cash basis of...