Reference no: EM132276294

Question 1 - 150- words with reference.

When it comes to a healthy community, education is key. How do you reach communities about breaking the disease chain when those communities may be difficult to reach? Do you use the same communication methods from one community to the next?

Question 2 - 150 words with reference.

There are some global health issues that receive more attention than others. Here is a interesting article that talks about the rise and fall of global health issues. What are your thoughts?

Question 3 -  Please respond the below statement - 125 words with reference

Out of the four methods, there are two approaches that are commonly used: Cost method and equity method. Emphasis will be placed on those two methods.

The cost method of accounting is a passive method that is used for long-term investments that do not influence the company (Accounting for Investments, 2017). This method is used when there is less than 20% ownership stake. This is not always the rule but it is generally used when deciding if this method is appropriate. With this method, stock purchases are recorded as non-current assets on the balance sheet at the purchase price. That amount is not changed in any way unless the stocks are sold or additional shares are bought. Also with this method, dividends are recorded as income and taxed where appropriate. As with any process there are advantages and disadvantages. The advantages of this methods are there is less paperwork, calculations are easier, and working papers are used instead of the general ledger. The disadvantages are there is not a self-check for errors, problems are harder to identify, and there is a greater amount of risk.

The equity method is used if there is a 20% to 50% investment stake in another company where there is a greater amount of influence or control (Hoyt, et al., pg. 4). Investments are recorded the same as the cost method but dividends are not treated as income. Instead dividends are treated as a reductions in the investment account. The advantages of this method are there is a self-checking feature where certain figures should tally, problems are easily identified, financial statements are more useful, and return on investment is easier to calculate. The disadvantages of this method are it is more complex, dividends are not shown as income, and it does not use working papers (WealthHow, 2018).

There are advantages and disadvantages of each method. The company must carefully evaluate their financial situation in order to decide which method is appropriate. The company must take into consideration whether their ownership stake is less than 20% or greater than 20% before choosing the best method.

Accounting for Investments: Cost or Equity Method. (n.d.).

Hoyle, J.B., Shaefer, T., &Doupnik, T. (2017). Advanced Accounting (13th ed.). New York, NY: McGraw-Hill Education.

The Perfect Explanation of the Cost Method of Accounting.

Question 4 - please respond the below statement -125 words with reference.

The cost method is used when companies only invest less than 20% in another company. One can see this happening when bigger companies invest in small companies (Hoyle, Shaefer &Doupnik, 2017). One example that comes to mind is the show Shark Tank where there is a panel of big-time entrepreneurs who review proposals of small-time entrepreneurs. If the proposal is presented in a well thought out manner than one other those panel members have the option to award a certain percent in that individual business. This means that having less than 20% invested in the company they don't have a weighted influence on the decisions that the company makes.

One disadvantage that cost method is that bigger companies can't help with decision making for the company they invested in. When it comes to a start-up company that is getting an initial investment from a bigger company; there should be some room were the bigger company can offer suggestions for improvement since they may have invested and no one else did. The cost method also has a stipulation that can be seen as an advantage for the (investee) and a disadvantage for the (investor). This is when the investor records their initial invest under 20% as a historical cost which does not allow them to make a change to their investment if the investee fair-market value increases. This means that the investee company pays the appropriate dividends at the percentage level. This clause is was put in place by Generally Accepted Accounting Principles.

The equity method stated that if an investor company make an investment in smaller companies between the 20%-50% that they are allowed to have an influence decision making aspect in the investee company (Hoyle, Shaefer &Doupnik, 2017). Companies will only use this method if the can make an impact on financial decisions and operation of the company.

After doing the reading and researching the two issues that presented themselves; one can be seen as an advantage/disadvantage for both the investor and investee and the other can be seen as a disadvantage for the investee company. If the investee company is doing great both companies benefit greatly, but if the investee company suffers a loss that is detrimental it can impact both companies in a negative way. The other disadvantage for the investee company is having another company input suggestion on how things should go just because they are in the 20-50 percentile.

In conclusion, if I would have to choose which method I would want to use for my future company it would be the cost method. This is only because I would initially have more say so on what goes on with the day to day operations and the financial decisions. I feel that it is important because if I developed the company concept by myself; I wouldn't want people to just walk in and try to change things unless I hired someone on as a consultant.