P Corporation purchased 60% of the shares of S Corporation on January 01, 2019 for P2,200,000. On that date, S Corp. reported retained earnings of P1,000,000 and had P2,000,000 of shares outstanding. P’s retained earnings was P4,000,000 at acquisition. P accounts for its investment in S under the cost method. The companies recorded the following results for 2019 & 2020: P Corporation S Corporation 2019: Net Income P700,000 P350,000 Dividends Paid 250,000 300,000 2020: Net Income 900,000 400,000 Dividends Paid 300,000 150,000 What amount of consolidated retained earnings will be reported on December 31, 2020?
P Corporation purchased 60% of the shares of S Corporation on January 01, 2019 for P2,200,000. On that date, S Corp. reported retained earnings of P1,000,000 and had P2,000,000 of shares outstanding. P’s retained earnings was P4,000,000 at acquisition. P accounts for its investment in S under the cost method. The companies recorded the following results for 2019 & 2020:
P Corporation S Corporation
2019:
Net Income P700,000 P350,000
Dividends Paid 250,000 300,000
2020:
Net Income 900,000 400,000
Dividends Paid 300,000 150,000
What amount of consolidated retained earnings will be reported on December 31, 2020?
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