On January 1, 2008 Polo Corp. issued 200,000 additional shares of P10 par value Ordinary Share Capital in exchange for all ordinary shares of Solo Corp. Immediately before this business combination, Polo's shareholders' equity was P6,000,000 and Solo's shareholders equity was P2,000,000. On January 1, 2008, fair market value of Polo's ordinary share was P20 per share, and fair market value of Solo's net assets was P4,000,000. The net income of Polo for the year ended December 31, 2008, exclusive of any consideration of Solo, was P1,250,000. Solo's net income for the year ended December 31, 2008 was P300,000. During 2008, Polo paid dividends amounting to P450,000. Polo had no other business transaction with Solo in 2008. Goodwill impairment loss in 2008 is P100,000. 1. How much is the consolidated shareholders' equity at December 31, 2008? a. P8,800,000 c. P11,000,000 b. P9,100,000 d. P13,550,000
On January 1, 2008 Polo Corp. issued 200,000 additional shares of P10 par value Ordinary
Share Capital in exchange for all ordinary shares of Solo Corp. Immediately before this business
combination, Polo's shareholders' equity was P6,000,000 and Solo's shareholders equity was
P2,000,000. On January 1, 2008, fair market value of Polo's ordinary share was P20 per share,
and fair market value of Solo's net assets was P4,000,000. The net income of Polo for the year
ended December 31, 2008, exclusive of any consideration of Solo, was P1,250,000. Solo's net
income for the year ended December 31, 2008 was P300,000. During 2008, Polo paid dividends
amounting to P450,000. Polo had no other business transaction with Solo in 2008.
impairment loss in 2008 is P100,000.
1. How much is the consolidated shareholders' equity at December 31, 2008?
a. P8,800,000 c. P11,000,000
b. P9,100,000 d. P13,550,000
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