In: Accounting
Stonemusic purchased several investments during 2018. At 31
December 2018, the company had the following investment in ordinary
share below. The investment is considered as
available-for-sale:
100,000 Starship shares
Cost per share $12
Fair value per share $10
During 2019, the net income for Starship is $200,000. Starship declared and paid cash dividends of $1.2 each share on 31 December 2019.
The fair value of the investments on 31 December 2019 is shown as below:
Starship Company Fair Value
$15 per hare
Assume Stonemusic has significant influence over the management of Starship Company (the investment represents 25% interest in the net assets of Starship), what is the reported amount of the investment shown on Stonemusic’s 2019 statement of financial position?