On December $31,20$X$0,$ Pushkin Company purchased $30\%$ of the shares of Simkins Inc. for

$$2,300,000.$ This provided Pushkin with significant influence over Simkins. On this date,

Simkins had common shares of $$2,000,000$ and retained earnings of $$2,500,000.$ All assets and

liabilities of Simkins were equal to their fair values with the following exceptions:

Simkins' retained earnings balance at December $31,20x2,$ was $$3,850,000.$ None of Simkins"

land was sold in the three years after acquisition. Pushkin is following IFRS and management is

very concerned about showing as high a net income as possible.

Required:

a$)$ Determine the allocation of the acquisition differential on the date of acquisition.

b$)$ Calculate the investment income in Simkins for the years $20$X$1$ and $20$X$2,$ and prepare all

journal entries that Pushkin would record relative to its investment in Simkins for the $20$X$1$ and

$20x2$ years. Assume the amortization of the FV increments is $$5,000$ for $20x1$ and $$15,000$ for

$20x2.$

c$)$ Calculate the balance in the Investment in Simkins account at December $31,20x2.$

d$)$ How should Pushkin report this investment is it is following ASPE? If options are available be sure to

discuss the pros and cons of every option $($both for SFP presentation and income recognition$)$ before

making a recommendation