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Problem 18-9 (AICPA Adapted) Grant Company acquired 30 % of South Company's voting share capital for P2,000,000 on January 1, 2019. Grant's 30% interest in South gave Grant the ability to exercise significant influence over South's operating and financial policies During 2019, South earned P1,500,000 and paid dividends of P500,000 South reported earnings of P1,000,000 for the six months ended June 30, 2020, and P2,500,000 for the year ended December 31, 2020 but paid dividend of P1,000,000 on October 1, 2020. On July 1, 2020, Grant sold half of the investment in South for P2,000,000 cash On such date, the investment is measured at fair value through profit or loss. The fair value of the retained investment is P2,200,000 on July 1, 2020 and P2,400,000 on December 31, 2020. 1. What amount should be recognized as investment income for 2019 as a result of the investment? 150,000 b. 450,000 c. 500,000 d. 750,000 . 2. In the December 31, 2019 statement of financial position, what is the carrying amount of the investment? 2,000,000 b. 2,450,000 c. 2,600,000 d. 2,300,000 . 3. What total amount of income should be reported for 2020? a. 2,250,000 b. 2,100,000 c. 1,950,000 d. 2,050,000 475