Cowboys Corporation purchases a 25% interest in Giants Corporation on January 2, 2020, for $ 800,000. At that time, the carrying amount of Giants' net assets was $ 2,952,000. Any excess of the cost of the investment over the Cowboys' share of the Giants' carrying amount can be attributed to unrecorded intangibles with a useful life of 20 years. Giants declared and paid a dividend of $ 16,000 and reported a net income of $ 52,000 for its year ended December 31, 2020.Cowboys is considered to have significant influence on Giants.

Instructions

Assume Cowboys is a publicly accountable enterprise that applies IFRS.Prepare Cowboys' 2020 entries to record all transactions and events related to the investment in its associate on:

1. Prepare Cowboys' 2020 entries to record all transactions and events related to the investment in its associate on:

i ) January 2, 2020, (2 marks)

ii ) December 31, 2020. (9 marks)

1. Calculate the value of Cowboys investment on Giants on December 31, 2020. (4 marks)