purple ltd acquired a 22% interest in white ltd for $250000 cash on 1

july 2019. the directors of purple ltd believe this investment represents significant influence over the investee. all the identifiable assets and liabilities of white ltd were recorded at fair value. profits and dividends for the years ended 30 june 2020 were as follows:

profit after tax : $ 130,000

dividend paid : $24,000

required:

a. prepare journal entries in the records of purple ltd for each of the hear ended 30 june 2020 in relation to its investment in the associate, White ltd. (assume purple ltd doesnot prepare consolidated financial statement) ( 6 marks)

b. Calculate the carrying amount of the investment in white ltd on 30 june 2020. 4 marks.