X Ltd$.($X$)$ purchased $40\%$ of Y Ltd$.($Y$)$ on January $1,2022,$ for $$400,000.$ Y paid dividends of

$$50,000$ in each year. Y$\text{'}$s income statements for $2022$ and $2023$ showed the following.

$x$ Ltd$.(x)$ purchased $40\%$ of $Y$ Ltd$.($Y$)$ on January $1,2022,$ for $$400,000.$ Y paid

dividends of

$$50,000$ in each year. Y$\text{'}$s income statements for $2022$ and $2023$ shquad the

following.

Time left $1$:$29$:$35$

At December $31,2022,$ the fair value of the investment was $$440,000$ and at

December $31,2023,$ the fair value of the investment was $$420,000.$

Required $(25$ marks$)$:

a$)$ Prepare X$\text{'}$s journal entries for $2022$ and $2023,$ assuming that this is a non$-$

strategic investment and is accounted for at fair value through profit and loss

$($FVTPL$)\mathrm{.}2022$

$2023$

Income $($loss$)$ before income taxes

$$100,000$

$($$$60,000)$

Income taxes expense $($recovery$)$

$40,000$

$(15,000)$

Net income $($loss$)$

$$60,000$

$($$$45,000)$

Other comprehensive income $($next of tax$)$

$20,000$

$25,000$

Comprehensive income $($loss$)$

$$80,000$

$($$$20,000)$

At December $31,2022,$ the fair value of the investment was $$440,000$ and at December $31,2023,$ the fair value of the investment was $$420,000.$

Required $(25$ marks$)$:

a$)$ Prepare X$\text{'}$s journal entries for $2022$ and $2023,$ assuming that this is a non$-$strategic investment and is accounted for at fair value through profit and loss $($FVTPL$).$

b$)$ Prepare X$\text{'}$s journal entries for $2022$ and $2023,$ assuming that this is a significant influence investment and will be reported using the equity method.