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Chapter 13 38 13-11: On January 1, 2017, Polo Company pays P270,000 cash and also issues 18,000 shares of PIO par common stock with a market value of P330,000 for the net asset of Sure Company. In addition Polo Company pays P30,000 for registering and issuing the 18,000 shares and P70,000 for professional fees to eflect the combination. Summary balances immediately before the combination are as follows (in thousands): Polo Company Book Value Cash Inventories Other current assets Plant assets - net P350 120 30 260 Sure Company Sure Company Book Value Fair Value P40 P40 80 100 20 20 180 180 P320 P340 Total assets P760 P160 80 420 30 40 Current liabilities Other liabilities Common stock, P10 par Retained carnings Total liabilities and equity P30 SO 200 40 100 P760 P320 What is the total asset of Polo Company after the acquisition? P1,090,000 b. P1,080,000 P1,260,000 d. P1,060,000 13-12: On March 1, 2017, Ss Corporation acquired for P1,400,000 all the net assets of MM Company. On the date of the combination, the carrying value of MM's identifiable net assets was P1,150,000. The current fair value of MM's inventories was P200.000 less than their carrying values, and the current fair value of MM's plant assets was P400,000 larger than their carrying amount. The current fair values of all identifiable net assets of MM were equal to their carrying value. The journal entry prepared by SS corporation to record the business combination includes: a. A debit of P200,000 to Inventories. b. A credit of P400,000 to Plant Assets (net). A debit of P350,000 to Goodwill. d. A debit of P50,000 to Goodwill. C