QUESTION 5 Total of 7 marks At 30 June 2014, High Ltd has a 28% investment in an associate, Low Ltd, which it has owned for several years. The following information relates to the investment in the associate. . The investment originally cost $400,000. The fair value of the net assets of Low Ltd at the date of acquisition was $1,000,000. 0 From the date of the investment and up to 30 June 2014, the retained earnings of Low Ltd had increased by $220,000. 0 The net loss after tax of Low Ltd for the year ended 30 June 2014 was $52,000. . During the year ended 30 June 2014, Low Ltd paid a dividend of $6,000. 0 During the year ended 30 June 2014, High Ltd sold Low Ltd inventory at a profit before tax of $6,000. A quarter of the inventory is still on hand. . The tax rate is 30%. Required: (i) Assuming that High Ltd prepares consolidated financial statements and uses the equity method to account for its investment in Low Ltd in its own financial statements, prepare iournal entries for the year ended 30 June 2014. Show all calculations. (5 marks) (ii) Using the equity method, determine the amount of High Ltd's investment in Low Ltd at 30 June 2014. Show all calculations (2 marks) (Total marks question 5: 5 + 2 = 7 marks)