PROBLEM 2 Grapes Co. purchased 80% of the outstanding shares of Lemon Go. for 500.000 on Jan.1. 2018. On this dateI the net assets of Lemon Go. had a book value of P700000. Any difference in Grapes' cost of acquisition is allocated to Lemon C035 non cash assets which did not approximate their fair values specifi-lly. Accounts Receivable which was overstated by P20.000. inventory was understated by P10.000; building with a 10 year-life was understated by P50.000. equipment with a 5 year-life overstated by P20.000. The following were the results of operation for years 2013 and 2019 for both companies: Grapes Co. 2013(P) 2019(P) Net income 500.000 650.000 Dividends declared 20.000 1 5.000 Lemon Co. Net income 300.000 350.000 Page 2 Dividends declared 15.000 12.000 Required: Determine the following 4. if the total assets in Dec. 31 year 2019 of Grapes Co. amounted to P3.000.000 and Lemon Co's assets amounted to P1.000.000. determine the consolidated assets as of year 2019. A. 3.000.000 B. 3.528.000 C. 3.529.000 D. 4.029.000 5. If the accumulated earnings of Grapes Co. on Jan.1. 2010 amounted to P400300 and the non- controlling interest on January 1. 2018 is stated at fair value. determine the consolidated retained eamings on December 31, 2019. A. 2.096.500 B. 2.020.600 C. 2.095.800 D. 1.690.600