On January 1^st.2019, X Company purchased 10% (10,000 common shares) of Y Company for $690,000 when Ys shareholders equity was $5,200,000, and it classified the investment as FVTPL.

On January 1^st.2020, X acquired another 30% (30,000 common shares) of Y for $1,400,000.

On both dates any purchase price differential was allocated to land.

The following information relates to the Y Company:-

Market Price per share on December 31,2019 was $35,00 per share

Market Price per share on December 31,2020 was $37 per share

Reported Net Income in 2019 was $500,000

Reported Net Income in 2020 was $520,000

Dividends paid in both years was $480,000

At a management meeting the CEO of X had the following questions.

a. Will the X Company continue to classify the investment as FVTPL in 2020 (7 marks)?

b. What factors will be considered in determining whether the equity method should now be used (6 marks)?

c. They would like to see the balance in the investment account at the end of Year 2020

under both options (7 marks).

Required:-Provide answers to the above questions and the balance in the investment account at December 31^st, 2020.