Reference no: EM132554629

On June 30, 2017, Field Corporation purchased 25% of the outstanding ordinary shares of JG Co. at a total cost of P2,400,000. The book value of JG Co.'s net assets on acquisition date was P7,200,000. For the following reasons, Field was willing to pay more than book value for JG Co. stock:

1. JG has depreciable assets with a current fair value of P200,000 more than their book value. These assets have a remaining useful life of 10 years.
2. JG Co. owns a tract of land with a current fair value of P900,0000 more than its carrying amount.
3. All other identifiable tangible and intangible assets of JG Co. have current fair values that are equal to their carrying amounts.
4. JGCo. reported net income of P1,860,000, earned evenly during the current year ended December 31, 2017. Also in the current year, it declared and paid cash dividends of P730,000 to its ordinary shareholders. Market value of JG Co.'s ordinary shares at December 31, 2017 is P10 million. Field Corporation's financial year-end is December 31.

Question 1: What amount of investment revenue should Filed report on its income statement for the year ended December 31, 2018, under the equity method?

Select one:

a. P182,500

b. P230,000

c. P232,500

d. P235,000