On January 1, Year 4, X Inc. purchased 22% of the voting shares of Y Inc. for $100,000, such that significant influence is assumed to exist. The net income and paid dividends for Y for the following two years are as follows:

Net IncomeDividends

Year 4$50,000$20,000

Year 5$70,000$80,000

On January 31, Year 6, X sells all of its shares of Y Inc. for $125,000 cash. Please assume that Y Inc. reports a net loss of $10,000 for January, Year 6.

(1) What would be gain or loss from sale on January 31, Year 6, assuming that the shares are reported at cost under ASPE? [4 marks]

(2) What would be gain or loss from sale on January 31, Year 6, assuming that the shares are reported using the equity method under IFRS? [8 marks]