On 1 July 2014, Kokos Ltd acquired a 25 percent interest in Pier Ltd for $220 000 in cash. Kokos Ltd has no other investments. Extracts from Pier Ltd's financial statements for the years ended 30 June 2015 and 30 June 2016 are as follows:

1. For the year ended 30 June 2015, prepare the journal entries for Kokos Ltd to account for its investment in Pier Ltd under the:

a. Cost method

b. Equity method.
2. Calculate the present value in Kokos Ltd's balance sheet for investment in Pier Ltd as at 30 June 2016 under the:

a. Cost method

b. Equity method.
3. What is meant by an investing company having a significant influence over an investee company?

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Net profit Dividends paid (30 March) 30/6/2016 $ 250 000 (15000) 30/6/2015 $ 180 000 (15000)