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What amount is reported on Flounder statement

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Question - Flounder Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $862,600 for 45,400 shares, and is equal to 10% of Gregson's carrying amount. Gregson declared and paid a $0.75 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $521,000 for 2020. The fair value of Gregson's shares was $20 per share at December 31, 2020. Flounder is a public company and applies IFRS.

1. Prepare the journal entries for Flounder for 2019 and 2020, assuming that Flounder cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model.

2. Prepare the journal entries for Flounder for 2019 and 2020, assuming that Flounder can exercise significant influence over Gregson.

3. 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?

4. Where is the investment reported on statement of financial position?

5. What amount is reported on Flounder's statement of comprehensive income in 2020 under each of these methods, and where are the amounts reported?

Reference no: EM132755568

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