Hanuman Corp Is a Medium-Sized Corporation That Has Long Dominated

Hanuman Corp is a medium-sized corporation that has long dominated their market. With a strong cash-flow position, they have decided to invest excess cash strategically. In particular, Hanuman made periodic investments with their main supplier, Shiva. Although Hanuman currently owns 18% of the common shares of Shiva, it does not yet have significant influence over the operations of this investee company. Hanuman accounts for its investments in Shiva using IFRS 9 and the fair value through other comprehensive income model without recycling.
The controller has gathered the following information about relevant transactions and requests your assistance in preparing required adjusting entries:
1. In 2020, Hanuman acquires shares of Ahimsa Corp and Metta Ltd, for short-term trading purposes. Hanuman purchased 100,000 shares of Ahimsa for $ 1.2 million and the shares currently have a fair value of $ 1.4 million. Hanuman's investment in Metta has not been profitable: the company acquired 45,000 shares of Metta at $ 20 per share and they currently have a fair value of $ 634,500.
2. Before 2020, Hanuman had invested $ 22.4 million in Shiva and, at December 31, 2019, the investment had a fair value of $ 21.3 million. While Hanuman did not sell or purchase any Shiva shares this year, Hanuman declared and paid a dividend totalling $ 2.2 million on all its common shares, and reported 2020 net income of $ 13.6 million. Hanuman's 18% ownership of Shiva has a December 31, 2020, fair value of $ 21,405,000.
Instructions
a) Prepare the appropriate adjusting entries for Hanuman as at December 31, 2020.
b) Prepare the dividend and adjusting entries for the Shiva investment, assuming that Hanuman's 18% interest results in significant influence over Shiva's activities.

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To bring the investment to its fair val...

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