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Struggling with the last section for FVTOCI implications Advanced Accounting Her Company purchased 26,000 common shares (20%) of Him Inc. on January 1, Year 4,
Struggling with the last section for FVTOCI implications
Advanced Accounting
Her Company purchased 26,000 common shares (20%) of Him Inc. on January 1, Year 4, for $442 000. Additional information on Himfor the three years ending December 31, Year 6, is as follows: Market Value Dividends per Share atYear Net Income Paid December 31Year 4 $260,000 $195, 800 $18Year 5 292,588 208,888 28Year 6 312,a80 227,580 23 On December 31, Year 6, Her sold its investment in Him for $598,000. Required: (a) Compute the balance in the investment account at the end of Year 5, assuming that the investment is classified as (Omit $ sign in your response.)(i) FVTPL Balance in investment account % |520000| @ (i) Investment in associate Balance in investment account % [471900 | @ (iii) FVTOCI Balance in investment account % |520000| @ (b) Calculate how much income will be reported in net income and other comprehensive income in each of Years 4, 5, and 6, and intotal for the three years assuming that the investment is classified as (Leave no cells blank - be certain to enter "O" whereverrequired. Omit $ sign in your response.)(i) FVTPLYear 4Year 5Year 6TotalDividend income39, 00041, 60045, 500126, 100Unrealized gains26, 000V5209078, 000Gain on sale78, 09078, 000Net income65, 000v93, 600123, 590282, 100Total OCIV(ii) Investment in associateYear 4Year 5Year 6TotalEquity income52, 000$58,50062, 490172,900Gain on saleV109, 290109, 200Net income52, 090v58, 500v171, 600$282, 100Total OCI (iii) FVTOCIYear 4Year 5Year 6TotalDividend income39, 00041, 60045 , 509126, 100Gain on saleNet income6939 , 09041, 600$45 , 500$126, 100Other comprehensive incomeUnrealized gain26, 09052, 000$78, 000Gain on saleEXTotal other comprehensive income26,090v52,000156, 090234,000xComprehensive income65, 090$93, 600201, 500$360, 100xStep by Step Solution
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