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Determine the amount of the gain or loss on disposal

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Reference no: EM132915881

Question - Lauren Inc. received dividends from its common share investments during the year ended December 31, 2020, as follows:

A cash dividend of $12,250 is received from Peel Corporation. Lauren owns a 1.2% interest in Peel.

A cash dividend of $68,000 is received from Vonna Corporation. Lauren owns a 30% interest in Vonna and a majority of Lauren's directors are also directors of Vonna Corporation.

A cash dividend of $172,000 is received from Express Inc., a subsidiary of Lauren.

a. Determine how much dividend income Lauren should report on its 2020 consolidated statement of comprehensive income.

b. On April 11, 2020, Chad Corp. purchased as a long-term investment (accounted for using FV-OCI without recycling) 6,000 common shares of Roddy Ltd. for $76 per share, which represents a 2% interest. On December 31, 2020, the shares' market price was $81 per share. On March 3, 2021, Chad sold all 6,000 shares of Roddy for $94 per share.

Assume that all companies follow IFRS.

Determine the amount of the gain or loss on disposal that should be included in Chad's net income in 2021 and in its other comprehensive income. The investment in Roddy Ltd. was Chad Corp.'s only investment.

c. Prepare the journal entries for situation 2 for 2021.

Reference no: EM132915881

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