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How much is the total consideration transferred recognized as a result of the business combination?

How much is the total consideration transferred recognized as a result of the business combination?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On September 1, Parent Company acquired Subsidiary Company. The consideration is payable as follows:   ·         an immediate payment of P2,000,000;
·         a further payment of P750,000 after one year if profit before interest and tax for the first year following acquisition exceeds P350,000; and
·         a further payment of P750,000 after two years if profit before interest and tax for the second year following acquisition exceeds P400,000.
At the date of acquisition, the fair value of these two payments is assessed as P500,000. 
How much is the total consideration transferred recognized as a result of the business combination?

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