Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS.What amount is reported for the investment in Gregson shares on the December 31, 2020 statement of financial position under each of these methods in Fair Value Method and Equity Method? Fair ValueMethod Equity MethodInvestment $enter a dollar amount $enter a dollar amount Where is the investment reported on statement of financial position?The Investment accounts under both Fair Value Method and Equity Method are likely to be included in current assets / non-current assets / non-current liability / current liability (choose one) What amount is reported on Grouper's statement of comprehensive income in 2020 under each of these methods, and whereare the amounts reported?Grouper Inc.Statement of Comprehensive IncomeFair Value MethodEquity Method2$242$2$Other comprehensive income:Effect on comprehensive income for 2020%24

Step1 Under equity method, return is not accountable, i.e., dividend is not considered and in fair…

Answered: Grouper Inc. acquired 10% of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS.

What amount is reported for the investment in Gregson shares on the December 31, 2020 statement of financial position under each of these methods in Fair Value Method and Equity Method?

		Fair Value Method		Equity Method
Investment		$enter a dollar amount		$enter a dollar amount

Where is the investment reported on statement of financial position?

The Investment accounts under both Fair Value Method and Equity Method are likely to be included in current assets / non-current assets / non-current liability / current liability (choose one)

What amount is reported on Grouper's statement of comprehensive income in 2020 under each of these methods, and where
are the amounts reported?
Grouper Inc.
Statement of Comprehensive Income
Fair Value Method
Equity Method
2$
24
2$
2$
Other comprehensive income:
Effect on comprehensive income for 2020
%24

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