1. Entity A bills its branch for merchandise shipments 25% of sale. As of cut-offf date, December 31, 2021, the following data were available.

	Outside supplier	Shipment form home office
Beginning Inventory	120,000	300,000
Purchases	360,000	471,000
Ending Inventory	150,000	420,000

The branch returned P15,000 merchandise to the home office acquired at billed

Price. How much is the amount of allowance for overvaluation account that was realized in December?

63,000

87,500

84,000

66,000

2. PPP Corporation issued ordinary share capital with a par value of P675,000 and a market value of P1,050,000 to acquire the net asset of Sss Corp. in a business combination . Immediately before the business combination the book and fair values of the net identifiable assets of PPP and SSS are as follows:

	PPP Book Value	SSS Book Value Fair Value
Assets	3,000,000	690,000	900,000
Liabilities	813,000	280,500	282,000

Determine the amount that should be reported as total assets of the combined entity immediately following the business combination.

2,805,000

3,900,000

3,690,0

4,332,000