Bing Industries (Bing) is a public company that has been growing significantly the last several years. As a result, the company has excess cash and decided to purchase a few investments during the year. You are new to the accounting department. The controller has asked you to evaluate these investments and provide guidance on how to recognize them on their December 31, 2020 financial statements. Where relevant, if an investment qualifies to be recorded using FV-OCI, the company's policy is to make an election to designate the investment as FV-OCI. The company reports interest and other investment income and losses separately. All transactions related to the investments were paid and received in cash. The controller provides you with the following information regarding these investments: 1. On January 2, 2020, the company purchased 20,000 shares of the available 100,000 common shares of Madison Manufacturing (MM), at a cost of $35 per share. The amount paid for the investment is equal to Bing's share of the book value of MM's net assets. Bing appointed one member to MM's board of directors. There are four directors on the board. One of Bing's executives has also been hired as a consultant to MM to advise on some equipment acquisitions. The company intends to hold onto the investment for the long term, as they use the services of MM. On December 30, 2020, MM reported net income of $400,000 and declared a total cash dividend of $100,000. A valuation on December 31, 2020 indicates the shares have a fair value of $45 per share. 2. On January 7, 2020, the company purchased 3,000 common shares of Zoom Video Communications Inc. for $71.90 per share. Management's intention is to trade these shares and earn short-term profits from appreciation in prices. On September 23, Bing sold 1,800 of these shares when they were trading at $500 per share. On December 31, 2020, the shares were trading at $400 per share. 3. Bing used some of the proceeds from the Zoom sale to purchase 5,000 common shares of the Bank of Nova Scotia for $55 a share on October 19, 2020. The bank's shares provide a consistent dividend yield; as a result, management intends to hold these shares for the long term, collect cash flows from the dividends, and perhaps sell them in several years. Management does not intend to trade these shares. On November 28, 2020, the bank paid out a cash dividend of $1.20 per share. On December 31, 2020, the shares were trading at $70 per share. Required: Start this question on a new page. Show all calculations and analysis to get full marks. Part A [19.5 marks] For each of the above investments: a) Explain how Bing Industries should account for the investment. Provide an explanation for your recommendation. [4 marks] b) Provide all of the necessary journal entries for the investment for 2020. [15.5 marks] Part B [7.5 marks] Assume it is now February 15, 2021. On this date, Bing sold the following investments: 1. The balance of their Zoom shares for $575 per share in cash. 2. 10% of their Bank of Nova Scotia shares for $90 per share in cash. Provide the journal entries to recognize the sale of these investments on February 15, 2021