What amount of income from investment

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Reference no: EM132780935

Question - Crown company holds an investment of 30% in the ordinary shares of royal company, an associate that has a net assets of 4,000,000 for the year ended december 31, 2014 which includes the current year net profit of 490, 000. The associate has issued 100, 000 9% cumulative preference shares with a nominal value of 10. The preference shares are classified by the associate as equity instruments. The associate has not declared dividends on the cumulative preference shares since 2013.

Required -

1: What is the carrying value of crown company's investment in associate as of December 31, 2014?

2: What amount of income from investment should crown company assuming it does not hold any interest in the preference shares of royal company?

Reference no: EM132780935

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