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Find what is amount of investor ltd investment in associate

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Reference no: EM132563458

At 30 June 2019, Investor Ltd purchased 30% of the shares of its associate, Associate Ltd. The following information relates to the investment in the associate.

  1. The investment originally cost $350 000. The fair value of the net assets of Associate Ltd at the date of acquisition was $950 000.
  2. The net profit after tax of Associate Ltd for the year ended 30 June 2020 was $120 000.
  3. During the year ended 30 June 2020, Associate Ltd paid a dividend of $12 000.
  4. During the year ended 30 June 2020, Investor Ltd sold Associate Ltd inventory at a profit before tax of $65 000. Half of the inventory is still on hand.
  5. The tax rate is 30%.

Question 1: Using the equity method, what is the amount of Investor Ltd's investment in Associate Ltd at 30 June 2020?

Reference no: EM132563458

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