Question

Brief Exercise 12-9 Hiroole Inc., a publicly traded company, purchased 30% of Dong Ltd.s common shares for $229,000 on Janua

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Answer #1
Amount $
Equity Method FVTPL Model Cost Model
Statement of Financial Position:
Long term Investments             312,100         274,000      229,000
Income Statements
Other revenues & Expenses
Dividend Revenue                         -               11,400         11,400
Income from associates                94,500                     -                    -  
Unrealized gain on long term investments                         -               45,000                  -  
Working:
Dividend revenue                11,400 (38,000 x 30% )
Unrealized gain on long term investments                45,000 (274,000 - 229,000 )
Income from associates                94,500 (315,000 x 30% )
Long term Investments-Equity Method
Purchase cost             229,000
Add: Income from associates                94,500
Less: Dividend received                11,400
Long term Investments-Equity Method             312,100
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