2. Arkin Corporation acquired ?59E' of the outstanding shares of Sharp Company on January 2, 2016 for consideration transferred of P4,320000. The price paid includes a control premium amounting t P120000. On the date of acquisition, the related cost of business combination amount to P30000. O January 2, 2016, Sharp Company's stockholder's equity accounts were: Ordinary SharesP5,?00,000 an- Retained EarningsP1360000. An examination of the acquired company's assets and liabilities on th date of acquisition revealed that there were assets with book values different from their fair values. Th- merchandise inventory of Sharp is overstated by P130000: Land, which was undervalued by P90000[ Equipment, which was overvalued by P?20,000 and Copyright was undervalued by P540000. Inventories were all sold in 2016.The equipment had a remaining life of 3 years while copyright had . remaining life of 5 years. During 2016, intercompany sales of merchandise on account amount t- P1,930,000 of which P126,000 remains in ending inventory. Likewise, the December 31, 2016 inventor includes P144,000 from downstream sales. The Arkin Corporation's mark-up was 20% of sales whil Sharp Company's selling price is at 120% of cost. On the rst day of the second month of the second quarter of 201?, there was an upstream sale of Ian: for P2,?00000. On this date the land was carried on the selling company's books at P2,340000 a amount which is equal to fair value on the date of acquisition. On the rst day of the last month of thin quarter of 201?, there was a downstream sale of furniture for P300000. On this date the furniture wa carried on selling company's books net of accumulated depreciation at P210000. The furniture wa estimated to have a remaining life of 5 years on the date of sale. On the rst day of the last month of th: year 201?, there was an upstream sale of building for P6,?20000. On this date the building was carrier on selling company's books, net of accumulated depreciaon at P0160000, The building was estimate- to have a remaining life of 3 years on the date of sale. During 201?, intercomapany sales of merchandise on account amount to P3,240000 of which P360,00I is from upstream sales. Likewise, the December 31, 201? inventory includes P2?0,000 from downstrear sales. The acquirer corporation accounts for its investment account in subsidiary using the cost methoc Unconsolidated Statement Of Financial Position as of December 31, 201? show: ARKIN COMPAN'I' SHARP COMPANY Cash P3,240000 P1,300,000 Trade Receivable 1,020,000 960,000 Merchandise Inventory 2,640,000 1,?40,000 Furniture, net ?20,000 540,000 Equipment, net 1,140,000 660,000 Building, net 9,060,000 6,540,000 Machinery, net 430,000 360,000 Land 5,330,000 3.000.000 Copyright, net 660000 240000 Investment in Sharp Co. 4,320,000 Cost of Goods Sold 6,900,000 2,400,000 Loss on sale of machinery 60,000 130,000 Loss on sale of building 360,000 1,440,000 Expenses 3,340,000 1,620,000 Dividends Declared 2,230,000 1,920,000 P42,600000 P2 3,400,000