How much is Gabe Corp share in the profit of Babe Inc

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Problem - Gabe Corp. acquired 20% interest in Babe, Inc on May 31, 2020 and uses the equity method in accounting for its 20% interest. The profit reported by Babe, Inc. in 2020 is P2,000,000 which was earned evenly throughout the period. Babe, Inc has outstanding 5% non-cumulative preference shares with an aggregate par value of P5,000,000. No dividends were declared by Babe, Inc. on the preference shares in the last two years but declared P200,000 dividends on its preference share for the current year. How much is Gabe Corp's share in the profit of Babe, Inc.?

a. P360,000

b. P204,167

c. P350,000

d. P210,000

Reference no: EM132888114

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