On July 1, 2020, SM acquired 80% of outstanding shares of BDO in exchange for P4M cash and 100,000 preferred shares with par value of P100 and quoted price of P200. On the acquisition date, the net assets of BDO has book value of P39M but a building with remaining useful life of 10 years is overstated by P4M. On October 1, 2020, BDO sold an equipment to SM at a gain of P200,000. On the date of sale, the equipment has remaining life of 5 years. On October 1, 2020, SM rented a space to BDO at a monthly rental of P50,000. For the year ended December 31, 2020, BDO reported net income of P900,000 and declared dividends of P100,000 on December 30, 2020. On the other hand, SM reported net income of P2M on its separate income statement and declared dividends of P1,000,000. On the separate financial statements of SM, the retained earnings on December 31, 2019 is P10,000,000 while its stockholders equity is P25,000,000. SM accounted its Investment in BDO in its separate financial statements using cost method.
1). What is the Consolidated net income or group profit for the year ended December 31, 2020?
2). What is the Consolidated retained earnings as of December 31, 2020?
