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ABC Company merged into DEF Company on July 1, 2021. In exchange for the net assets at fair market value of ABC Company amounting to

ABC Company merged into DEF Company on July 1, 2021. In exchange for the net assets at fair market value of ABC Company amounting to P696,450, DEF, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker's fee P23,600; Accountant's fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. ABC will pay an additional cash consideration of P455,000 in the event thatDEF's net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income for the period ended December 31, 2021 amounted to P1,250,000. The additional cash consideration was paid. Compute the amount of expense to be recognized in the income statement for the year ended December 31, 2021.

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