On January 1,20X8,XZ Co

question 18

Essay

On January 1,20X8,XZ Co.purchased 3,000 shares,representing 30% of AR Limited,for $390,000.XZ is a publicly traded company.AR's total net income was $86,000 for the year ended December 31,20X8.AR also paid dividends in total of $25,000 during 20X8.At the year end,each share of AR was trading at $150 per share.
Required:
a.Based on the information above,show the journal entries that XZ would have used to report its original purchase and any related investment income for AR for 20X8 assuming that XZ reports its investment in AR using FVTPL.What is the investment account balance at the end of December 31,20X8?
b.Based on the information above,show the journal entries that XZ would have used to report its original purchase and any related investment income for AR for 20X8 assuming that XZ reports its investment in AR as a significantly influenced investment.What is the investment account balance at the end of December 31,20X8?

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Definitions:

Trade Agreements

Legal arrangements between countries that determine the rules of trade, including tariffs, quotas, and other trade restrictions.

Semiotics

is the study of signs and symbols and their use or interpretation.

Back Translation

The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.

Symbolic Linguistics

The study of how language symbolizes and conveys meaning in human communication.