On January 5, 2006, Blue Company acquired 30% of the ordinary shares that carry voting rights at a general meeting of shareholders of Red Company for P300,000. For the year ended December 31, 2006, Red recognized net income of P400,000.

On January 6, 2006, Red declared a dividend of P100,000 for the year 2005. On December 31, 2006, Red declared and paid a dividend of P150,000 for the year 2006. At December 31, 2006, the fair value of Blue's investment in Red is P400,000.

1. How much income should Blue recognize from its investment in Red?

2. What is the amount of investment in associate should Blue report in its statement of financial position?

3. Assuming the shares were acquired on March 1, 2006, how much income should Blue recognize from its investment in Red?