Multiple Choice $12-$ L

On January $1,2008,$ Pedestal Company purchased $80\%$ of the outstanding shares of Starlet Company at a cost of P$800,000.$ On that date, Starlet Company had P$300,000$ of Ordinary Share Capital and P$600,000$ of Retained Earnings.

For $2008,$ Pedestal Company had income of P$300,000$ from its own operations and paid dividends of $P150,000.$ On the other hand, Starlet Company reported a net income of P$100,000$ and paid dividends of P$40,000.$ All assets and liabilities of Starlet Company have book values approximately equal to their respective market values.

Pedestal Company uses the equity method to account for its investment in Starlet Company. Impairment loss on goodwill for $2008$ is P$4,000.$

The amount Pedestal Company should record as Equity in Starlet Company Income for $2008$ is

a$.,P78,000$

c$.,$ P$82,000$

b$.,P80,000$

d$.,P76,000$