Terra Inc. bought 67.56% of the outstanding common shares of Abeona Co. for cash worth P87,994.54 and Terra Inc. common shares. On this date, Terra Inc. common shares have a market value of P60.91 a share respectively. Abeona Co. common shares drop to P59.51 per share right after the acquisition. On this date (January 1 2009), Abeona Co.'s stockholders' equity consisted of the following: Share Capital (par 25) 998,760.00 Share Premium 968,099.06 Retained Earnings 600,557.45 The book values of , Abeona Co.'s assets and liabilities approximate fair value except for the following: Book Value Fair Value Notes Current Assets 1,708,927.78 1,561,351.14 The excess was due to inventory with book value of P100,000. Half was sold in 2010, the rest were deemed obsolete by 2011 and was written off Plant Assets 7,736,052.74 9,287,455.48 The excess was due to two assets: Equiipment with excess of P200,000. It was depreciated using the straightline method for 8 years. Depreciation was always charged to Operating Expenses. Land had an excess of P250,000. The land was subsequently sold to a 3rd party company during 2011. You noted the following details: 1. On January 31 2009, Abeona Co. sold inventory to Terra Inc.. The cost of inventory is P250,000 on a gross margin on cost of 25%. 10% remains in ending inventory. All remaining inventory were sold to 3rd parties by 2010. 2. On June 30 2009, Abeona Co. bought 2,000, P1,000 face value bonds of Peach from the open market at a yield of 10%. The bonds were initially issued at 12% on January 1, 2009. It pays semiannual coupons pegged at 11%. for the next four years every June 30 and December 31. Abeona Co. intends to hold the investment to maturity 3. On December 31, 2010, Terra Inc. sold two pieces of equipment to Abeona Co. with a combined purchase cost of P750,000 for P300,000. It was originally depreciated over 8 years when it was bought on June 30, 2005. Abeona Co. estimates useful life of 5 years from December 31, 2009. 4. During 2010, Terra Inc. sold inventory to Abeona Co.. The intercompany sales were P400,000 on a gross margin of 40%. Only 40% were sold. Three-fourhts of the remaining inventory was sold in 2011. The rest were sold in 2012. 5. During 2010, Abeona Co. sold inventory to Terra Inc.. The intercompany sales were P200,000 on a gross margin on cost of 25%. Only 75% were sold. The rest were sold in 2011. The following shos the financial statements of Terra Inc. and Abeona Co. as of/for the period ending December 31, 2011. What is the Consolidated Financial Statements (except for cash flows) as of/for the period ending December 31, 2011. Terra Inc. Abeona Co. Sales (3,029,888.66) (1,507,251.09) CGS 905,671.15 774,710.22 Opex 265,595.32 189,789.74 Int Exp, net 61,025.84 38,816.88 Other exp, net 406,398.41 255,000.00 Net Income (1,391,197.93) (248,934.25) STATEMENT OF RETAINED EARNINGS Beg RE (1,166,594.29) (1,054,587.57) Net Income (1,391,197.93) (248,934.25) Dividends 105,593.20 41,716.73 End RE (2,452,199.02) (1,261,805.08) Beg NCI Net Income Dividends End NCI BALANCE SHEET Current Assets 1,503,809.14 1,747,931.08 PPE 5,281,823.14 6,347,839.44 Inv in Sub 1,332,150.56 - Other Assets 1,171,842.45 2,382,095.59 GW Total 9,289,625.29 10,477,866.11 Current Liab (842,987.04) (1,343,507.29) Bonds Payable (3,811,152.69) (2,218,830.99) Other NCL (468,000.57) (1,577,284.61) Share Capital (1,435,516.70) (998,760.00) Share Premium (1,862,410.74) (968,099.06) UGL (276,246.28) (100,000.00) RE (593,311.28) (3,271,384.16) NCI Total (9,289,625.29) (10,477,866.11)