BUSINESS COMBINATION

Olivia Parent Company acquired 85% of the outstanding common stock of Georgia

Subsidiary on January 1, 2015 for P1 357 150. On this date,

Subsidiary's common stock and retained earnings balances were P1 000 000 and

P300 000, respectively. The fair values of Subsidiary's net assets were equal

to their values except for a patent, which had a book value of P63 000, a fair

value of P42 000, and a remaining life of 7 (seven) years and goodwill

uniformly impaired for 12 (twelve) years.

INCOME STATEMENT PARENT SUBSIDIARY SALES 2 184 700 1 600 000 INCOME FROM SUBSIDIARY 182 200 GAIN ON SALE OF LAND 7 000 LOSS ON SALE OF EQUIPMENT (25 000) COST OF GOODS SOLD (1 050 000) (920 000) DEPRECIATION AND OTHER (650 000) (445 000) EXPENSES NET INCOME 673 900 210 000 STATEMENT OF RETAINED PARENT SUBSIDIARY EARNINGS RETAINED EARNINGS , 1/1/2018 1 406 100 700 000 NET INCOME 673 900 210 000 DIVIDENDS (150 000) (90 000) RETAINED EARNINGS, 1 930 000 820 000 12/31/2018BALANCE SHEET PARENT SUBSIDIARY CASH 255 750 224 000 ACCOUNTS RECEIVABLE 718 000 250 000 INVENTORY 1 040 000 800 000 INVESTMENT IN SUBSIDIARY 1596 250 EQUIPMENT 1 900 000 1 150 000 ACCUMULATED DEPRECIATION (500 000) (300 000) LAND 490 000 340 000 PATENT 36 000 TOTAL 5 500 000 2 500 000 ACCOUNTS PAYABLE 350 000 680 000 COMMON STOCK 3 220 000 1 000 000 RETAINED EARNINGS 1 930 000 820 000 TOTAL 5 500 000 2 500 000