REH Company Trial Balance as of January 1, 2006 DR CR Ordinary shares - 30,000 fully 30,000 shares Retained Earnings 50,000 Equipment 42,000 Accumulated Depreciation 12,000 Inventory 20,000 Accounts Receivable 10,000 Patents 15,000 Accounts Payable 8,000 Cash 13,000 100,000 100,000 . At this date REH is acquired by BNC with REH going into liquidation Ordinary shareholders of REH Company are to receive 2 fully paid ordinary shares in BNC for every share held or alternatively P2.50 in cash payable half at the exchange date and half in one year thereafter. Accounts Payable and cost of liquidation amounting to P5,000 were paid by REH prior to turnover to BNC. 5,000 ordinary shares elect to receive cash BNC shares are selling at P1.10 The incremental borrowing rate of BNC is 10% per annum. What is the cost of combination? a. P66,931 b. P67,500 c.P66,000 d.P61,931