On January 1, 2021, Entity A Company acquired all the assets and assumed all the liabilities of Entity B Company and merged Entity B into Entity A. In exchange for the net assets of Entity B, Entity A gave its bonds payable with maturity value of P 1,500,000, a stated rate of 10% interest payable semiannually on June 30 and December 31, a maturity of January 1, 2026 and yield rate of 13%. The following present values are shown below. PV for 1 for 5 periods at 13% 0.543 PV of 1 for 10 periods at 6.5 % 0.533 PV of Ordinary Annuity for 5 periods at 13% 3.517 PV of Ordinary Annuity for 10 periods at 6.5 % 7.189 Balance sheets for Entity A and Entity B (as well as fair value data on January 1, 2021 were as follows Entity A (book value) Entity B Entity B (book value) (Fair Value) Cash P 500,000 228,000 228,000 Receivables 625,000 300,000 270,000 Inventories 1,500,000 464,000 620,000 Land 720,000 200,000 630,000 Buildings 1,900,000 820,000 108,000 Accumulated depreciation-buildings (650,000) (341,000) Equipment 525,000 273,000 78,900 Accumulated depreciation- Equipment (140,000) (205,500) Total Assets P 4,980,000 1,738,500 Bonds payable 304,000 315,000 Common Stock, P 30 par value 2,400,000 Common stock, P 15 par value 709,500 Other Contributed Capital Retained Earnings Total equities 200,000 425,000 2,380,000 300,000 P4,980,000 1,738,500 In addition to the bond issue, Entity A Company agreed to pay an additional P 200,000 on January 1, 2023 to Entity B Company if the average income of Entity B company during the next two year exceeds P 150,000 per year. The expected value is P 69,000 based on the expected probability of achieving the target average income. On October 1, 2021, because Entity B Company's accumulated income already amounts to P 200,000, the expected value of the contingent consideration became P 105,000. Required: a. Compute the goodwill (Gain on bargain purchase) to be reported by Entity A Company for the year ended December 31, 2021. b. How much will be the net effect in profit or loss for the year due to the business combination?