Determine amounts to be reported on tawatinaw balance sheet

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Question - In January 2021, Tawatinaw Group paid $650,000 for 60,000 shares of Neerlandia Inc., giving Tawatinaw a 30% ownership interest in Neerlandia. On December 31, 2021, Neerlandia paid a $95,000 cash dividend and reported profit of $575,000. Neerlandia's shares were trading at $13 per share on this day. Both Neerlandia and Tawatinaw have a December 31 year end. Tawatinaw is able to appoint one of Neerlandia's six board members. Tawatinaw reports under ASPE.

a. Record the above transactions assuming Tawatinaw reports its investment in Neerlandia using the equity method.

b. Determine the amounts to be reported on Tawatinaw's balance sheet and income statement related to its investment in Neerlandia at December 31, 2021.

c. Repeat parts a. and b. assuming Tawatinaw elects to report its investment in Neerlandia using the cost method.

Reference no: EM133171592

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