On January 1, 2020, LL Company acquired 20,000 shares, representing 20% of the outstanding shares of TT
Question:
On January 1, 2020, LL Company acquired 20,000 shares, representing 20% of the outstanding shares of TT Limited at a price of $15 per share. On July 31, 2020, TT declared and paid a dividend of $1 per share. TT’s net income for 2020 was $250,000. On December 31, 2020, the shares of TT were trading on the Toronto Stock Exchange at $18 per share.
Required:
LL is not sure how to report its investment in TT shares. Using the following format, indicate the amounts that would appear on the balance sheet and the statement of comprehensive income for 2020 if the investment (a) has been irrevocably elected to be measured at fair value through OCI, (b) is classified as FVPL, or (c) is an associate.
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a Fair value through OCI election Balance Sheet Assets Amount Investme...View the full answer
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