On January 2, 2020, Jordano Company purchased 25,000 shares representing 25% of Trustworthy Co.s 100,000...
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On January 2, 2020, Jordano Company purchased 25,000 shares representing 25% of Trustworthy Co.s 100,000 shares of outstanding preference stock for P1,170,000. On that date, the carrying amount of the total net assets of Trustworthy Co. was P6,000,000. On the same date, it was determined that a machinery with remaining useful life of 5 years has a fair value exceeding its book value by P320,000.
During 2020, Jordano sold inventory to Trustworthy at a selling price of P150,000, with cost of P75,000, of which 45% remained unsold during 2020. In addition, on June 30, 2020, Trustworthy sold equipment with carrying amount of P95,000 and remaining useful life of five (5) years for P120,000.
Trustworthy reported earnings of P800,000 and P1,500,000 for 2020 and 2021, respectively. It also declared and paid cash dividends of P500,000 and P800,000 on 2020 and 2021, respectively.
REQUIRED: Determine the following:
1. Investment income for 2020.
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