During 2018, Infinity Inc. which is a privately held company reporting under the Canadian Accounting Standards for

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Question:

During 2018, Infinity Inc. which is a privately held company reporting under the Canadian Accounting Standards for Private Enterprises, held common shares of Ioniq Inc. Transactions in those shares were as follows:

· On January 1, 2018, Infinity acquired 20,000 of the 200,000 outstanding common shares of Ioniq at a cost of $10 per share plus brokerage of 1%.

· On March 31, 2018, Infinity received a dividend of $0.50 per share on its Ioniq shares.

· On July 1, 2018, Infinity acquired an additional 20,000 shares of Ioniq at a cost of $11 per share plus brokerage of 1%.

· On September 30, 2018, Infinity received a dividend of $0.60 on its Ioniq shares.

· On November 30, 2018, Infinity sold half of its holding in Ioniq for $12 per share and paid brokerage of 1% on that transaction.

· On December 31, 2018, shares in Ioniq were trading at $12.50 per share.

· During 2018, Ioniq reported a net income of $240,000, earned evenly through the year.

Required:

a) Prepare journal entries for Infinity Inc. for its investment in Ioniq (and related investment income) if the investment was always a non-strategic investment and classified as an investment reported at fair value with the valuation differences going to net income.

b) Prepare journal entries for Infinity Inc. for its investment in Ioniq (and related investment income) if the investment was always a non-strategic investment and classified as an investment reported at fair value with the valuation differences going to other comprehensive income.

c) Prepare journal entries for Infinity Inc. for its investment in Ioniq (and related investment income) if the investment was always a significant influence investment accounted for and reported using the equity method. (ASPE does not require that the investor accounts for the amortization and impairment of the acquisition differential when using the equity method.)