7. Sage Company bought 40% of Eve's Company's outstanding ordinary shares on January 1,2014 for P4,000,000. The carrying amount of Eve's net assets at the purchase date totaled P9,00,000. Fair values and carrying amounts were the same for all items except for plant and inventory, for which fair values exceeded their carrying amounts by P900,000 and P100,000, respectively. The plant has an 18-year life. All inventories were sold during 2014. During 2014, the investee reported net income of P1,200,000 and paid a P200,000 cash dividend. What amount should be reported as investment income in the income statement for the year ended December 31,2014? a. 480,000 c. 360,000 b. 420,000 d. 320,000