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Prepare the journal entries for bridgeport

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Reference no: EM132462789

Bridgeport Inc. acquired 20% of the outstanding common shares of Gregson Inc. on December 31, 2019.

  • The purchase price was $833,400 for 46,300 shares, and is equal to 20% of Gregson's carrying amount.
  • Gregson declared and paid a $0.70 per share cash dividend on June 15 and again on December 15, 2020.
  • Gregson reported net income of $537,000 for 2020.
  • The fair value of Gregson's shares was $23 per share at December 31, 2020. Bridgeport is a public company and applies IFRS.

QUESTION:

Question A) Prepare the journal entries for Bridgeport for 2019 and 2020, assuming that Bridgeport can exercise significant influence over Gregson.

Question B) What amount is reported for the investment in Gregson shares on the December 31, 2020 statement of financial position under each of these methods in Fair Value Method and Equity Method?

Reference no: EM132462789

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