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There are 200,000 common shares issued and outstanding in Champion Incorporated. On December 31, 2020, A&A Company bought 65,000 common shares of Champion Incorporated for

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There are 200,000 common shares issued and outstanding in Champion Incorporated. On December 31, 2020, A&A Company bought 65,000 common shares of Champion Incorporated for $685,000. This acquisition provided A&A Company with significant influence over Champion Incorporated. On December 31, 2020, Champion Incorporated reported assets of $3,100,000 and liabilities of $1,240,000 on its balance sheet. The book values of Champion Incorporated's assets and liabilities are equal to their fair values, except for depreciable assets. Champion Incorporated's depreciable assets have a fair value of $850,000 and a net book value of $780,000. These depreciable assets have a remaining useful life of 6 years. On June 25, 2021, Champion Incorporated paid a total of $64,000 in dividends to its common shareholders. For the year ended December 31, 2021, Champion Incorporated generated net income of $268,000. A&A Company follows IFRS. Required: 1. Calculate the amount of goodwill included in the $685,000 purchase price of the investment. (2 marks) 2. Prepare the journal entries required for A&A Company's investment in Champion Incorporated on each of the following dates: a. December 31, 2020 (1 mark) Required: 1. Calculate the amount of goodwill included in the $685,000 purchase price of the investment. (2 marks) 2. Prepare the journal entries required for A&A Company's investment in Champion Incorporated on each of the following dates: a. December 31, 2020 (1 mark) b. June 25, 2021 (1.5 marks) c. December 31, 2021 (3.5 marks)

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