What amount of share in profit of associate to be reported

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Question 1: On January 1, 2019, Rina Company purchased 40% of the outstanding ordinary shares of another entity for P5,000,000 when the net assets of the investee amounted to P10,000,000. 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 P2,000,000 greater than carrying amount and inventory whose fair value was P1,000,000 greater than the cost. The equipment has a remaining life of 5 years and the inventory was all sold during 2019. The investee reported net income of P6,000,000 for 2019 and paid no dividends. What amount of Share in Profit of Associate to be reported in 2019?

Reference no: EM132891163

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