Her Company purchased 48,000 common shares (20%) of Him Inc. on January 1, Year 4,...
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Accounting
Her Company purchased 48,000 common shares (20%) of Him Inc. on January 1, Year 4, for $816,000. Additional information on Him for the three years ending December 31, Year 6, is as follows:
Year | Net Income | Dividends Paid | Market Value per Share at December 31 |
Year 4 | $480,000 | $360,000 | $18 |
Year 5 | 540,000 | 384,000 | 20 |
Year 6 | 576,000 | 420,000 | 23 |
On December 31, Year 6, Her sold its investment in Him for $1,104,000.
Required:
(a) Compute the balance in the investment account at the end of Year 5, assuming that the investment is classified as
(i) FVTPL
Balance in investment account $
(ii) Investment in associate
Balance in investment account $
(iii) FVTOCI
Balance in investment account $
(b) Calculate how much income will be reported in net income and other comprehensive income in each of Years 4, 5, and 6, and in total for the three years assuming that the investment is classified as (Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response.)
(i) FVTPL
Year 4 | Year 5 | Year 6 | Total | ||||
Dividend income | $ | $ | $ | $ | |||
Unrealized gains | |||||||
Gain on sale | |||||||
Net income | $ | $ | $ | $ | |||
Total OCI | |||||||
(ii) Investment in associate
Year 4 | Year 5 | Year 6 | Total | ||||
Equity income | $ | $ | $ | $ | |||
Gain on sale | |||||||
Net income | $ | $ | $ | $ | |||
Total OCI | |||||||
(iii) FVTOCI
Year 4 | Year 5 | Year 6 | Total | ||||
Dividend income | $ | $ | $ | $ | |||
Gain on sale | |||||||
Net income | $ | $ | $ | $ | |||
Other comprehensive income | |||||||
Unrealized gain | $ | $ | $ | ||||
Gain on sale | |||||||
Total other comprehensive income | |||||||
Comprehensive income | $ | $ | $ | $ | |||
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