On January 1, 2019, Padre Company purchased 90% of the outstanding shares of Salve Company by

paying P693,000. On that date, Salve Company had P300,000 of Capital Stock and P400,000 of Retained

Earnings. Excess, if any, is attributable to undervalued machinery with a remaining life of 20 years. All other

assets and liabilities of Salve Company had book value approximated their fair market value.

On January 2, 2019, there is an inter-company sale of equipment for P42,000. The cost and accumulated

depreciation are P70,000 and P40,000, respectively. The equipment has a remaining life of six (6) years.

The net income from own operations and dividends paid of Padre Company and its subsidiary are as

follows (fiscal year ends December 31):

Net Income Dividends

2019 2020 2019 2020

Padre Company P160,000 P120,000 P10,000 P 7,000

Salve Company 70,000 40,000 12,000 8,000

.

Required:

A. Assuming that Padre Company is the seller (Downstream Sale), in the books of Padre Company:

Using Cost Model/Method:

1. The investment account on December 31, 2019 and 2020

2. The dividend income account on December 31, 2019 and 2020

Using Equity Method:

3. The investment account on December 31, 2019 and 2020

4. The equity in subsidiary income or net earnings account on December 31, 2019 and 2020

B. Assuming that Padre Company is the seller (Downstream Sale), in the consolidated financial statements

of Padre Company and Salve Company:

5. The investment account on December 31, 2019 and 2020.

6. The dividend income account on December 31, 2019 and 2020 if cost model/method is used.

7. The equity in subsidiary income or net earnings account on December 31, 2019 and 2020 equity

method is used.

8. The Profit Attributable to Equity Holders of Parent/Controlling Interest (Parent's Interests) in

Consolidated Net income for 2019 and 2020.

9. The Non-controlling interest in net income for 2019 and 2020.

10. Consolidated/Group Net Income for 2019 and 2020.

11. The cost of equipment on January 2, 2019, December 31, 2019 and December 31, 2020.

12. The accumulated depreciation on January 2, 2019, December 31, 2019 and December 31, 2020.

13. The net book value on January 2, 2019, December 31, 2019 and December 31, 2020.

C. Assuming that Salve Company is the seller (Upstream Sale), in the books of Padre Company:

Using Cost Model/Method:

14. The investment account on December 31, 2019 and 2020

15. The dividend income account on December 31, 2019 and 2020

Using Equity Method:

16. The investment account on December 31, 2019 and 2020

17. The equity in subsidiary income or net earnings account on December 31, 2019 and 2020

D. Assuming that Salve Company is the seller (Upstream Sale), in the consolidated financial statements of

Padre Company and Salve Company:

18. The investment account on December 31, 2019 and 2020

19. The dividend income account on December 31, 2019 and 2020 if cost model/method is used

20. The equity in subsidiary income or net earnings account on December 31, 2019 and 2020 if equity

method is used

21. The Profit Attributable to Equity Holders of Parent/Controlling Interest (Parent's Interests) in

Consolidated Net income for 2019 and 2020

22. The Non-controlling interest in net income for 2019 and 2020

23. Consolidated/Group Net Income for 2019 and 2020

24. The cost of equipment on January 2, 2019, December 31, 2019 and December 31, 2020.

25. The accumulated depreciation on January 2, 2019, December 31, 2019 and December 31, 2020

26. The net book value on January 2, 2019, December 31, 2019 and December 31, 2020