On January 1, 2020, two real estate companies (the parties – Packet Company and Sacket Company) set up a separate vehicle (Harrison Company) for the purpose of acquiring and operating a shopping center. The contractual arrangement between the parties establishes joint control of the activities that are conducted in Harrison Company. The main feature of Harrison’s legal form is that the entity, not the parties, has rights to the assets, and obligations for the liabilities, relating to the arrangement. These activities include the rental of the retail units, managing the car park, maintaining the center and its equipment, such as lifts, and building the reputation and customer base for the center as a whole.

As a result, Packet Company paid P1.6 million for 60,000 shares of Harrison’s voting common stock, which represents a 40% investment. No allocation to goodwill or other specific account was made. The joint control over Harrison is achieved by this acquisition and so Packet applies the equity method. Harrison distributed a dividend of P2 per share during the year and reported net income of P560,000. What is the balance in the Investment in Harrison account found in Packet’s financial records as of December 31, 2020?

AA and BB have established the AB Joint Operation. AA has a 60% interest in the joint operation and BB has a 40% interest.

AA contributed an asset with a carrying amount of P90,000 and a fair value of P120,000 and BB agreed to province technical services to the joint operation over the first two years of operations. The fair value of the technical services was agreed to be P80,000 and the cost to provide the services was estimated at P65,000 at the inception of the joint operation. 

As part of its initial contribution, the journal entry for joint operator AA:

AA and BB have established the AB Joint Operation. AA has a 60% interest in the joint operation and BB has a 40% interest.

AA contributed an asset with a carrying amount of P90,000 and a fair value of P120,000 and BB agreed to province technical services to the joint operation over the first two years of operations. The fair value of the technical services was agreed to be P80,000 and the cost to provide the services was estimated at P65,000 at the inception of the joint operation. 

As part of its initial contribution entry BB will record a:  

On January 1, 20×8 SME A and B each acquired 30 per cent of the ordinary shares that carry voting rights at a general meeting of shareholders of entity Z for P300,000. Entities A and B immediately agreed to share control over entity Z. For the year ended December 31, 20×8 entity Z recognized a profit of P400,000.

On January 2, 20×8 entity Z also declared a dividend of P100,000 for the year 20×7. 

On December 30, 20×8 entity Z declared and paid a dividend of P150,000 for the year 20×8. At December 31, 20×8 the fair value of each venturers’ investment in entity Z is P400,000. However, there is no published price quotation for entity Z. 

SME A and B must each recognize dividend income for the year 20×8 amounted to: