Practice Question 1: On January 1st,2013, ABC Inc., a publicly traded company, purchased 20% of the outstanding shares of DEF corp. for $200,000. While ABC Inc. has no specific plans for the DEF corp. shares they are always available for sale. ABC Inc. has made no IFRS special elections in regards to the DEF corp. shares. During the next two fiscal years, DEF corp. reported the following net income and dividends: Part 1: Record the journal entries ABC Inc. will be required to make for its investment in DEF corp. in 2013 and 2014. Part 2: Record the journal entries for 2013 and 2014 that ABC Inc. would require if its investment in DEF corp. was a strategic investment. ABC uses the cost method to record its strategic investments. Part 3: Provide the adjustments that would need to be made in 2014 if ABC Inc. had to report its strategic investment in DEF corp. under the equity method. Practice Question 1: On January 1st,2013, ABC Inc., a publicly traded company, purchased 20% of the outstanding shares of DEF corp. for $200,000. While ABC Inc. has no specific plans for the DEF corp. shares they are always available for sale. ABC Inc. has made no IFRS special elections in regards to the DEF corp. shares. During the next two fiscal years, DEF corp. reported the following net income and dividends: Part 1: Record the journal entries ABC Inc. will be required to make for its investment in DEF corp. in 2013 and 2014. Part 2: Record the journal entries for 2013 and 2014 that ABC Inc. would require if its investment in DEF corp. was a strategic investment. ABC uses the cost method to record its strategic investments. Part 3: Provide the adjustments that would need to be made in 2014 if ABC Inc. had to report its strategic investment in DEF corp. under the equity method