During 2017, Patrol Company purchased equity securities and designated as available for sale/ fair value through other comprehensive income. At December 31, 2017, the balance in the fair value adjustment account was a credit amount of P200,000 and unrealized loss of P130,000 net of deferred tax asset of P70,000. There were no security transactions during 2018. Pertinent data on December 31, 2018 are: Securities Historical cost Market C 1,500,000 1,600,000 1,200,000 1,400,000 A 2,300,000 2,400,000 Total 5,000,000 5,400,000 If securities are to be sold aggregately, the company will have to incur P150,000 transaction cost. On January 2, 2018, Power Company, a medium-sized entity, purchased 20% of Plant Corporation's 200,000 ordinary shares for P3,000,000 including a P50,000 transaction cost. This investment gives Power the ability to exercise significant influence over Plant Corporation. During 2018, Plant reported net income of P1,750,000 and paid cash dividends of P1,000,000 on its ordinary shares. As of December 31, 2018, the shares of Plant Corporation are traded and are currently selling at P81.25 per share. On January 2, 2018, Moore Company, a medium-sized enterprise, purchased 20% of Dem Corporation's ordinary shares for P3,000,000 including a P50,000 transaction costs. This investment gives Moore the ability to exercise significant influence over Dem but intends to hold the investment indefinitely. During 2018, Dem reported net income of P1,750,000 and paid cash dividends of P1,000,000 on its ordinary shares. Moore Company elected to use the cost method due to the fact that there are no published price quotations on Dem Corporation's shares. On July 1, 2018, Circle Company, a medium-sized entity, purchased 20% of the outstanding ordinary shares of Square Corporation for P800,000, when the fair value of Square's net assets was P4,000,000. The shares of Square Company are traded in the active market. Circle Company has elected the use of the fair value model to account for the investment in associate. The following data concerning Square are available for 2018: 12-months ended December 31, 2018 6-months ended P600,000 December 31, 2018 Net income P320,000 Dividends declared and paid 380,000 200,000 Shares outstanding 100,000 Market value of each shares P55 On January 2, 2018, East Company acquired 10% of the outstanding voting stock of West Company. On Jary 2, 2019, East Company gained the ability to exercise significant influence over financial and operating control of West by acquiring additional 20% of West's outstanding shares. The two acquisitions were made proportionate to the value assigned to West's net assets, which equaled their carrying values. For the years ended December 31, 2018 and 2019, West Company reported the following 2018 2019 Net income 12,000,000 13,000,000 Dividends paid 4,000,000 6,000,000 1. What amount of cumulative unrealized gain should Patrol Company report in its shareholders' equity on December 31, 2018? A. 200,000 260,000 400,000 D. 600,000 2 What amount of unrealized gain or loss should Power Company recognize in its December 31, 2018 statement of comprehensive income? A. none 250,000 300,000 350,000 3 What is the amount of income from investment that Moore should recognize in its investment in Dem Corporation at December 31, 2018? A 100,000 150,000 C. 200,000 350,000 In its profit or loss for the year ended December 31, 2018, how much should Circle report from this investment? none 40,000 300,000 340,000 5 In 2019, what amount should East Company report as current year investment income? 1,300,000 2,600,000 3,900,000 5,100,000