Problem 1: On January 2, 2020, the statement of financial position of Arden company and wonder company immediately before the combination are:

Arden Co. Wonder Co.

Cash P 2,700,000 P 90,000

Inventories 1,800,000 180,000

Property and equipment (net) 4,500,000 630,000

Total assets P 9,000,000 P 900,000

Current liabilities P 540,000 P 90,000

Ordinary shares, P100 par 900,000 90,000

Share premium 2,700,000 180,000

Retained earnings 4,860,000 540,000

Total Liab. & equity P 9,000,000 P 900,000

The fair value of Wonder Company's equipment is P918,000

Assume the following independent cases:

1. Assuming Arden company acquired 80% of the outstanding shares of Wonder company for P820,800 and NCI is measured at the proportionate share of Wonder company's identifiable net assets, how much is the consolidated stockholders' equity on the date of acquisition?

a. 8,460,000

b. 8,517,600

c. 8,679,600

d. 8,737,200

1. Assuming Arden company acquired 90% of the outstanding shares of Wonder company for P1,458,000 and NCI is measured at fair value, how much is the total consolidated assets on the date of acquisition?

a. 9,252,000

b. 10,710,000

c. 10,422,000

d. 8,964,000

Problem 2: Clark Company's stockholders' equity as of December 31, 2019 is P7,308,000. On January 1, 2020, Clark acquires 30% of Rome Company's ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. Clark acquired significant influence over Rome as a result of the stock acquisition. After 4 months, Clark purchases another 60% of Rome's ordinary shares for a cash payment of P3,942,000. On this date, Rome reports identifiable assets with a carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and a fair value of P3,240,000.

At the acquisition date, net loss reported by Rome for the 4-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. NCI is valued using the proportionate basis. Clark also paid the following: P90,000 for legal fees, P72,000 for finder's fee, P77,400 for accountant's fee, P64,800 for audit fee for SEC registration of stock issued and P19,800 for printing of stock certificates.

Immediately after the business combination, how much is the consolidated total equity?

a. 9,954,000

b. 10,782,000

c. 10,431,000

d. 9,243,000