How much is the cost of investment? * On January 31. 2022. Parent Company purchased al the identifiable net assets of Sub Company by transferring cash of P1.200,000 and issuing 100,000 shares with par value of P20 and fair value of P32. Parent will pay additional amount depending on the net income achieved by Sub at year-end: Not income e year-end 50,000.000 75,000.000 100,000.000 Consideration to be transferred 1.000.000 2,000.000 Case 3,000.000 Book value of Parent and Sub at the date of acquisition were as folows: Sub 800,000 1,400.000 Parent 1,000.000 1,600.000 2,400.000 5.000.000 10,000.000 2,400.000 2,000.000 1,600,000 Cash Accounts receivable Inventory Buldings Total assets 800.000 2,800.000 5,800.000 1,000.000 Accounts payable Common stock P2 par Share premium Retained eamings Total kabilies and equities 1,200.000 800.000 2,800.000 5,800.000 4,000.000 10,000.000 At the date of acquisition, Parent assessed that Sub will reach at least 60.000.000 of net income for 2022. Book value of the identifiable net assets of Sub on January 31, 2022 is P4,800,000. Temporary appraisal at the date of acquisition is P5,000,000. On December 31, 2022 an additional valuation resulted to a decrease of P500.000 from previous appraisal and fair value of the net assets were finalized on February 6, 2023 by a subsequent increase of P1,000,000 from last valuation. Parent paid P100,000 business combination expenses, 2/5 are direct, 2/5 are share issue costs, and 1/5 are indirect costs. Net income of Sub at 12/31/22 is PSOM.

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