On June 30, 2516. Cab Company purchased 25% of the outstanding ordinary shares of \"3 Co. at a total oost of P2,1DD,{IDO. The book value of IE Co.'s net assets on acquisition date was P?.20{],DOCI. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: I IB Co. has depreciable assets with a current fair value of Pi more than their book value. These assets have a remaining useful life of 1E!I years. I Hi! Co. owns a tract of land with a current fair value of \"00,3130 more than its carrying amount. I All other identiable tangible and intangible assets of IE Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1.2D,DD. earned evenly during the current year ended December 31, 2516. Also in the current year, it declared and paid cash dividends of P315,DDD to its ordinary shareholders. Market value of [B Co.'s ordinary shares at December 31, 2016 is P? million. Cabbage Company's nancial year-end is December 31. Questions: 1. What is the total amount of goodwill of IE Co. based on the price paid by Gab Company? HI'IEWEI': 2. What amount of investment inoome should Gab report in its inoome statement for the year ended December 31, 2516, under the equity method? Answer: 3. Under the equity method. the carrying value of lCab Company's investment in ordinary shares of IE Co. on December 31, 2016 should be Answer: |_;l 4. What amount should Gab Company report in its December 31. 2016. statement of financial position as its investments in IE Co. under the fair value method