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In early 2023, for the first time, Ayayai Corp. invested in the common shares of another Canadian company. It acquired 6,000 shares of Toronto Stock

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In early 2023, for the first time, Ayayai Corp. invested in the common shares of another Canadian company. It acquired 6,000 shares of Toronto Stock Exchange-traded Bayscape Ltd. at a cost of $82,500. Bayscape is projected to reach a value of $15.50 per share by the end of 2023 and $17 by the end of 2024 , and has consistently paid an annual dividend of $0.90 per share. Ayayal is also a Canadian public corporation with a December 31 year end. The controller of Ayayai is uncertain about which accounting method to use. The company is interested in establishing a closer relationship with Bayscape, but if that fails. Ayayai 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. 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. (3) Effect on total assets, Dec, 31,2024 (3) Effect on total assets, Dec. 31, 2024 Investments Cash (4) Etfect on 2024 net income eTextbook and Media List of Accounts In early 2023, for the first time, Ayayai Corp. invested in the common shares of another Canadian company. It acquired 6,000 shares of Toronto Stock Exchange-traded Bayscape Ltd. at a cost of $82,500. Bayscape is projected to reach a value of $15.50 per share by the end of 2023 and $17 by the end of 2024 , and has consistently paid an annual dividend of $0.90 per share. Ayayal is also a Canadian public corporation with a December 31 year end. The controller of Ayayai is uncertain about which accounting method to use. The company is interested in establishing a closer relationship with Bayscape, but if that fails. Ayayai 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. 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. (3) Effect on total assets, Dec, 31,2024 (3) Effect on total assets, Dec. 31, 2024 Investments Cash (4) Etfect on 2024 net income eTextbook and Media List of Accounts

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