Solution for QID #97162: Crown company holds an investment of 30% in the ordinary sha | StudyHelpMe

Crown company holds an investment of 30% in the ordinary shares of royal company, an associate that has a net assets of 4,000,000 for the year ended december 31, 2014 which includes the current year net profit of 490, 000. The associate has issued 100, 000 9% cumulative preference shares with a nominal value of 10. The preference shares are classified by the associate as equity instruments. The associate has not declared dividends on the cumulative preference shares since 2013.   Question 1: What is the carrying value of crown company's investment in associate as of December 31, 2014?