Question 2 (20 marks) Part 1 (3 marks) On January 1, 2022. Viral, Cheerful and Happy founded a new joint arrangement named Jovial. Cheerful invested land with a fair value of $1,400,000. Happy invested cash amounting to $1,400,000. Viral invested equipment with a fair value of $1,400,000. Viral, Cheerful and Happy agreed to share profits and losses equally. All major decisions are to be made with unanimous consent of the three parties. The liabilities of Jovial are guaranteed by the three investors. Required: Assume Viral reports under ASPE. Discuss briefly how Viral should account for its investment in Jovial. Explain your reasoning. Part 2 (17 marks) On January 1, 2022. Viral, Cheerful and Happy founded a new joint venture named Jovial. Cheerful invested land with a fair value of $1,400,000. Happy invested cash amounting to $1,400,000. Viral invested equipment with a fair value of $1,400,000. Viral had acquired the equipment a few years ago at a cost of $2,200,000, and the carrying amount on Viral's records on January 1, 2022 was $1,100,000. It had a remaining useful life of approximately five years. Viral received a 30% interest and $200,000 in cash in return for investing this equipment in the joint venture. On July 1, 2022, Viral sold furniture with a book value of $80,000 to Jovial for $100,000. The furniture had a remaining useful life of 4 years at the time of sale. In 2022, Viral sold inventory to Jovial for $150,000 at a gross profit $60,000. Jovial sold 80% of this inventory to outside parties by the end of 2022. Jovials net income for 2022 was $800,000, and it paid a dividend of $500,000 at its year-end, December 31, 2022. Both Viral and Jovial have an income tax rate of 25%. Viral reports under IFRS Required: a) Assume that the transfer of equipment by Viral to Jovial does not possess commercial substance. Calculate the amount of gain or loss (specify) that Viral will recognize on the transfer (2 marks) b) Assume that the transfer of equipment by Viral to Jovial possesses commercial substance. (i) Prepare the journal entry(ies) to record Virals investment in Jovial on January 1, 2022 (6 marks) (ii) Calculate the investment income that Viral will record related to its investment in Jovial for the year ended December 31, 2022 (5 marks) (iii) Calculate the amount that Viral will report its net investment in Jovial on the statement of financial position dated December 31, 2022 (4 marks)