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Kobe Company owns 50% of Lakers Companys cumulative preference shares and 30% of its ordinary...

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Accounting

Kobe Company owns 50% of Lakers Companys cumulative preference shares and 30% of its ordinary shares. Lakers shares outstanding at December 31, 2020 include P10,000,000 of 10% cumulative preference shares and P40,000,000 of ordinary shares.

Lakers reported profit of P8,000,000 for the year ended December 31, 2020. Lakers declared and paid P1,500,000 preference share dividends during 2020. Lakers paid no preference share dividends during 2019.

How much is the total amount to be recognized by Kobe Company in its 2020 profit or loss related to these investments?

Group of answer choices

P2,700,000

P2,450,000

P2,600,000

P2,850,000

Answer & Explanation Solved by verified expert
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