What amount of income should praise company report

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Question 1: On April 1, 2020 Praise Company purchased 25,000 shares of Maze Company's 100,000 outstanding ordinary shares for P300 per share. On December 31, 2020, Maze Company paid P2,000,000 cash dividends to its ordinary shareholders. Maze reported net of tax income for the whole year in the amount of P4,500,000. One of Maze assets was undervalued by P400,000 which was identified to a tangible asset with a remaining useful life of 20 years, what amount of income should Praise Company report in its 2020 profit or loss on this investment? (Income tax rate is 32%).

a) P828,750 c) P 843,750

b) P833,550 d) P1,115,000

Reference no: EM132892487

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