Part 4 Joint Venture Accounting ) suggested time of

Jason Inc and Vlad Inc. formed a joint venture on January 1, 2022.

Jason Inc. invested plant and equipment with a book value of $600,000 and a fair value of $950,000 for a 25% interest in the venture which was to be called Jinxtor Ltd. Jason Inc.s plant and equipment was estimated to provide an additional 7 years of utility to Jinxtor.

Vlad Inc. contributed assets with a fair value of $1,500,000 (including $150,000 in cash) for its 75% stake in Jinxtor.

Jason receives $100,000 in return for investing its plant and equipment.

Jinxtor reported a net income of $5,500,000 for 2022. The transactions set out above were considered to have commercial substance.

REQUIRED: Answer the following questions related to the above.

a) What amount would Jason record its initial investment in Jinxtor. 1 MARK

b) What would be the unrealized gain on January 1, 2022 arising from Jason's investment in Jinxtor. 2 MARKS

c) What would be the realized portion of the unrealized gain taken into income for the year ended on December 31, 2022 arising from Jason's investment in Jinxtor. 2 MARKS