PROBLEMS Problem 17-1 (AICPA Adapted) Boorish Company acquired a 30% interest for P5,000,000 on January 1, 2020. This cost exceeds the underlying net assets of the investee by P1,000,000 which is attributed to an undervalued equipment by the investee with useful life of five years. The investee reported the following information for 2020 and 2021. Net income Dividends paid 2020 4,000,000 3,000,000 2021 6,000,000 5,000,000 Required: Prepare journal entries on the books of Boorish Company from January 1, 2020 to December 31, 2021. Problem 17-2 (IAA) At the beginning of current year, Cynosure Company purchased 40% of the ordinary shares of another entity for P3,500,000 when the net assets acquired amounted to P7,000,000 At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost. The equipment has a remaining life of 4 years and the inventory was all sold during the current year. The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year. Required: 1. Prepare journal entries for the current year. 2. Compute the investment income for the current year