Problem 3 - NOLA owns 20% in a joint venture and uses the equity method to account for its interest in the joint venture. NOLA has joint control over the joint venture. In 2019, the joint venture sold inventory to NOLA for P 100,000 with a 50% gross profit on the transaction. The inventory remains unsold during 2019 and was only sold by NOLA to external parties only in 2020. NOLA's income tax rate is 30%. Assuming Joint Venture reports profit of P 1,200,000 and P 1,800,000 on December 31, 2019 and 2020, respectively:

REQUIRED:

1. What is the share in the profit of joint venture before adjustment for 2019 and 2020?

2. How much is the unrealized profit from upstream sale net of tax for 2019 and 2020?

3. How much is the adjusted share in profit of the joint venture in 2019 and 2020?