On January 1, 2019, Heaven Company acquired 20% of the ordinary shares of an associate for P6,000,000. On this date, all the identifiable assets and liabilities of the associate were recorded at fair value. An analysis of the acquisition showed that the goodwill of P300,000 was acquired. The net income and dividend of the associate were as follows                                 2019                     2020 Net income          3,000,000          4,000,000       Dividend paid      1,000,000          1,500,000 In December 2019, the associate sold inventory to Heaven Company for P900,000. The cost of the inventory was P600,000. This inventory remained unsold by Heaven Company on December 31, 2019. However, it was sold by Heaven Company in 2020. In December 2020, the associate sold inventory to Heaver. Company for P750,000. The cost of the inventory was P500,000. This inventory remained unsold by Heaven Company on December 31, 2020.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Problem 18-1 (IFRS)
On January 1, 2019, Heaven Company acquired 20% of the ordinary shares of an associate for P6,000,000. On this date, all the identifiable assets and liabilities of the associate were recorded at fair value.

An analysis of the acquisition showed that the goodwill of
P300,000 was acquired.

The net income and dividend of the associate were as follows
                                2019                     2020

Net income          3,000,000          4,000,000      

Dividend paid      1,000,000          1,500,000


In December 2019, the associate sold inventory to Heaven Company for P900,000. The cost of the inventory was P600,000.
This inventory remained unsold by Heaven Company on December 31, 2019. However, it was sold by Heaven Company in 2020.
In December 2020, the associate sold inventory to Heaver. Company for P750,000. The cost of the inventory was P500,000. This inventory remained unsold by Heaven Company on December 31, 2020.


Required:
1. Determine the investor's share in the profit of the associate for 2019.
2. Determine the investor's share in the profit of the associate for 2020.
3. Prepare journal entries on the books of Heaven Company in relation to the investment in associate.
4. Determine the carrying amount of the investment in associate on December 31, 2020.

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