1.

Consider the following data for intercorporate investments:

Year	Shares purchased (sold)	Price/share	Price/share
		Jan 1	Dec 31
20x1	220	$76	$66
20x2	(85)	56	71

All sales and purchases are assumed to occur on January 1. Price may vary from price on previous day (December 31).

	20x1	20x2
Investee eps	$7	$8
Investee dps	3	3

Investee eps (earnings per share); Investee dividend per share (dps)

Consider Trading, and the Equity method for classifying investment

Required:

1. Show the B/S carrying amount for each of the 2 years if the investment is classified as TRADING, and EQUITY METHOD (Show calculations) (6 marks)

20X1 20X2

TRADING

EQUITY-method

2. Show the total income recognized for each of the 2 years if the investment is classified as TRADING, and EQUITY METHOD (Show calculations) (9 marks)

20X1 20X2

TRADING

EQUITY-method