E$9\mathrm{.}18($LO $2,3,4,8,9)($Entry and Financial Statement Comparison of Cost, FV$-$NI$,$ and FV$-$OCI Approaches$)$ In early $2023,$ for the first time, HTSM Corp. invested in the common shares of another Canadian company. It acquired $5,000$ shares of Toronto Stock Exchange$$traded Bayscape Ltd$.$ at a cost of $$68,750.$ Bayscape is projected to reach a value of $$15\mathrm{.}50$ per share by the end of $2023$ and $$17\mathrm{.}00$ by the end of $2024,$ and has consistently paid an annual dividend of $$0\mathrm{.}90$ per share. HTSM is also a Canadian public corporation with a December $31$ year end.

The controller of HTSM is uncertain about which accounting method to use. The company is interested in establishing a closer relationship with Bayscape, but if that fails, HTSM considers the investment a good opportunity to make a gain on its sale in the future. The controller has been advised that the investment could be accounted for at cost or at fair value. If at fair value, a decision would have to be made about whether to put the changes in fair value through net income or other comprehensive income. As one step in making a decision, the controller would like to know what the effect would be on total assets and net income in each of $2023$ and $2024$ if the predictions about Bayscape$$s share prices and dividends are correct. Assume there would be no recycling of realized investment gains and losses.

Instructions

Prepare and complete a table with a column for each of the three accounting alternatives indicated and rows for journal entries to recognize each of the following: $(1)$ the $2023$ dividend, $(2)$ any December $31,2023$ adjustments, $(3)$ the $2024$ dividend, and $(4)$ any December $31,2024$ adjustments.

Based on the table in part $($a$),$ prepare a summary comparison of each accounting method, indicating the effect of applying each of the three accounting methods on: $(1)$ total assets at December $31,2023,(2)2023$ net income, $(3)$ total assets at December $31,2024,$ and $(4)2024$ net income.

Determine the effect on net income for the year ended December $31,2025,$ under each of the accounting method options, assuming the investment in Bayscape was sold in early $2025$ for $$17\mathrm{.}00$ per share.

Identify the accounting policy choices that would be available to the controller if HTSM applied ASPE instead of IFRS, and when each would be appropriate.