What amount should be reported as investment income

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Point 1: At the beginning of the current year, Ronald Company purchased 40% of the outstanding ordinary shares of New Company, paying P6,400,000 when the carrying amount of the net assets of New Company equaled P12,900,000. The difference was attributed to equipment which had a carrying amount of P3,000,000 and a fair market value of P5,000,000 and to building which had a carrying amount of 2,500,000 and a fair market value of P4,000,000. The remaining useful life of the equipment and building was 4 years and 12 years, respectively. During the current year, New Company reported net income of 2,300,000 and paid cash dividend of P2,500,000.

Question 1: What amount should be reported as investment income for the current year?

Reference no: EM132492495

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