Question 3A (15 marks) Gregory Inc. acquires 20% of the outstanding common stock of Handerson Inc. on December 31, 2010. The purchase price was $1,250,000 for 50,000 shares. Handerson Inc. declared and paid an 50.80 per share cash dividend on June 30 and on December 31, 2011 Handerson reported a net income of $730,000 for 2011. The fair value of Handerson's stock was $27 per share at December 31, 2011 Instructions (a) Prepare the joumal entries for Gregory Inc. for 2010 and 2011, assuming that Gregory cannot exercise significant influence over Handerson. The securities should be classified as available for sale. (5 marks) (b) Prepare the journal entries for Gregory Inc. for 2010 and 2011, assuming the Gregory can (5 marks) exercise significant influence over Handerson. (c) At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2011? What is the total net income reported in 2011 under each of these methods? (5 marks)