On January 1, 2019, CC Company acquired 60,000 shares, representing 20% of the outstanding shares of VV Limited, at $25 per share. On July 31, 2019, VV declared and paid a dividend of $3 per share. VV's net income for 2019 was $1,000,000. On December 31, 2019, the shares of VV were trading on the Toronto Stock Exchange at $31 per share.
Required:
CC is not sure how to report its investment in VV shares. Using the format provided, indicate the amounts that would appear on the balance sheet and the statement of comprehensive income for 2019 if the investment is considered to be (a)at fair value through OCI, (b)at fair value through profit or loss, or (c)an associate.

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2019, CC Company acquired 60,000 shares, representing 20% of the outstanding shares of VV Limited, at $25 per share. On July 31, 2019, VV declared and paid a dividend of $3 per share. VV's net income for 2019 was $1,000,000. On December 31, 2019, the shares of VV were trading on the Toronto Stock Exchange at $31 per share.
Required:
CC is not sure how to report its investment in VV shares. Using the format provided, indicate the amounts that would appear on the balance sheet and the statement of comprehensive income for 2019 if the investment is considered to be (a)at fair value through OCI, (b)at fair value through profit or loss, or (c)an associate.

On January 1, 2019, CC Company Acquired 60,000 Shares, Representing