Question 7: Investment in Associate with significant influence

Question '1": Investment in Associate with signicant influence [11 mantis] On January 3, ENE, Hego Ltd. Purchased 3,23l} shares {32%} ofthe common shares of Block Corp for $433,920. The followhg infonnation is provided about the identiable assets and liabilities of Block at the date of acquisition: Carrying Amount Fa'r "ul'ahe Assets not subiect to depreciation 5 544,[|t]l3 5 544,I]t]l] Assets subject to depreciation BSDMDD Stun-[I] [1D years remaining} Total identiable assets 1,3?4,[|t]|:| 1,4B4,IJ-l]|:| liabilities 93,[it]] QBJJIII During 21116, Eiloclc reported the following information on its statement of comprehensive i'icome: Income before discontinued operations $23?_tlt]t] Discontinued operations {net of tax} {3,400} Net inccime and comprehensive income 163,6[lt] Dividends declared and paid by Block, November 15, Et 11t],|:IlII-t] Assume that the 32% interest is sufficient to make Block an associate of tillego1 and that Mego is required to applyI IFRS for its litancisl rep-outing. The fair vtlue of Block's shares at December 31, 2D1liis $155 pershare. Fteguired: a} Prepare the joumal entry to record the purchase of the Block shines on January 3, 2018. b} Prepare all the necessary joun'ial entries with tutego's i'rvestrnent in Block for2l116_ Depreciable assets are depreciated on a straight-line basis. (hint: diin'ii:lendI income, fair value at December 31, 2916 including assets stbiect to depreciation} c} Alter you recorded the above, prepare the ioumal entry assuming you were informed that Mego's long-tetm business prospects had deteriorated and the nun-st Mega could expect torecover'nthe future orsell its intesti'nentin Block for December 31,3116, is $124 per share. [hint impa'n'nent entry}