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  3. ytn company purchased 17,500 common shares of xpl

YTN Company purchased 17,500 common shares of XPL Inc. on January 1, Year 1 for...

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Accounting

YTN Company purchased 17,500 common shares of XPL Inc. on January 1, Year 1 for
$275,000. XPL Inc. had 72,500 common shares outstanding. The following
informationrelates to XPL Inc.:
Net Income (loss) Dividends paid Market value/share at Dec. 31
Year 1 $235,000 $72,500 $14
Year 2 $-80,000 $28,000 $12
On January 1, Year 3, YTN sold Investment in XPL Inc. shares for $15 per share. YTN
has a December 31 year end.
Required (show all calculations for full marks)
i) Prepare the journal entries for Years 1 and 2 and on January 1, Year 3 assuming
the following independent scenarios:
a) Investor plans to sell the shares in the short term for profit
b) Investor elects to use FVTOCI (include closing JE on January 1, Year 3)
c) Investor has significant influence
ii) How much is the change in Retained Earnings from January 1, Year 1 to January
1, Year 3 for each scenario? Show all #s for each year to support your total change

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