FVTPL:

London Ltd. reported the following transactions and information regarding the shares of Dolma Corp:

• 15 October 20X2, purchased 3,000 shares at $42 per share plus $1,200 commission.

• 1 December 20X2, received $0.50 per share cash dividend.

• 31 December 20X2, fair value is $38 per share.

• 1 December 20X3, received $0.50 per share cash dividend.

• 31 December 20X3, fair value is $45 per share.

• 15 November 20X4, sold 1,000 shares at $41 per share less $450 commission.

• 1 December 20X4, received $0.50 per share cash dividend.

• 31 December 20X4, fair value is $40 per share.

Required:

1. Show the amounts and accounts that would be reported in earnings and the statement of financial position for 20X2, 20X3, and 20X4 if the company uses the:

   1. Cost method.

   2. FVTPL method.

   3. FVOCI-Equity method; realized amounts are transferred to retained earnings.

2. Explain when each of the above methods would be appropriate for this investment.