Dos Palmas, Inc. bought 40% of Adams' outstanding ordinary shares on January 2, 2019, for P4,500,000. The carrying amount of Adams' net assets at the purchase date totalled P9,000,000. Fair values and carrying amounts were the same for all items except for plant and inventories, for which fair values exceeded their carrying amounts by P900,000 and P100,000, respectively. Any remaining excess after recognizing undervalued assets will be accounted as goodwill. The plant has an 18-year life. All inventories were sold during 2019. During 2019, Adams' reported a profit of P1,200,000 and paid a P200,000 cash dividend.

Required:

Compute for the Goodwill due to Investment in Associate transaction

Investment Income for 2019.

Dividend Income for 2019.

Investment in Associates balance to be reported on the statement of financial position for 2019.

Use the same information above.

These transactions occurred during 2020:

Adam sold equipment at P100,000 with a carrying value of P150,000. The transaction resulted in a loss on sale of equipment at P50,000.

Adam sold inventories at P300,000 with a profit of 100,000 to Dos Palmas Inc. Half of the items are still part of the ending inventory of Dos Palmas Inc.

At the end of 2020, Adam reported a net income of P1,000,000 and paid P1,000,000 cash dividend.

Required:

Investment Income for 2020.

Dividend Income for 2020.

Investment in Associates balance to be reported on the statement of financial position for 2020.