Sheet1ACQUIRER : GPHACQUIREE: NORTHERN STAR80%20%100%PARENTNCITOTALCONSIDERATION TRANSFERRED ASSETSCash and Cash Equivalents3.600.904.50Plant Property and Equipment0.870.221.09Cash Contingency0.760.190.95Equity InstrumenyCommon Stock2.800.703.50Stock Contingency0.800.201.00Total 8.832.2111.04 BOOK VALUE OF NET IDENTIFIALE ASSETSCommon Stock1.600.402.00Retainied Earnings5.941.487.42Total 7.541.889.42ALLOCATED EXCESS1.300.321.62FVBVCash and Equivalents1.381.150.180.050.23Accounts Receivable3.202.670.430.110.53 Equipment6.915.760.920.231.15Patent0.140.120.020.000.02Advances from the officers(0.10)(0.09)(0.01)(0.00)(0.02)Income Tax Payable(0.08)(0.07)(0.01)(0.00)(0.01)TOTAL1.530.381.91BARGAIN PURCHASE GAIN(0.23)(0.06)(0.29)

JOURNAL ENTRIES:

Investment in Northern Star8.83Cash and Equivalents3.60Property, plant and equiment,net0.87Common Stock2.80Cash contingency0.76Stock contingency0.80

Retained Earnings0.01Cash and Equivalents0.01

Common Stock1.60Retained Earnings5.94Investment in Northern Star7.54

Cash and Equivalents0.23Accounts Receivable0.53Property, plant and equiment,net1.15Patent0.02Advances from Officers0.02Income Tax0.01Investment in Northern Star1.53NCI0.381.941.94Investment in Northern Star0.23Retained Earnings0.23

CONSOLIDATED FINANCIAL POSITIONGRAND PLAZA HOTELFOR THE YEAR ENDED DECEMBER 31,2013PARENTSUBSIDIARY Current AssetsDEBITCREDITTOTALCash and Equivalents205.891.150.23(3.61)203.66207.04Accounts Receivable337.512.670.530.0340.71340.18Inventory13.580.00.013.5813.58Prepaid Expenses and Other18.480.00.018.4818.48Due From Parties/Affiliates (Short-Term)1.890.00.01.891.89Short term Investment0.00.00.00.0Patent0.020.00.02Other Noncurrent Assets84.100.00.084.1084.10Investment In Affiliates/Joint Ventures48.470.00.048.4748.47Deferred Income Tax Asset (Long-Term)5.570.00.05.575.57Property, plant and equiment,net647.645.761.15(0.87)653.68653.40Refundable deposit0.00.00.00.0Real Estate Investment0.00.00.00.0Unrecorded Patent0.00.00.00.0Intagible asset excluding goodwill0.00.00.00.0Investment in Northern Star9.06(9.06)(0.00)0.0Investment in TBGI0.00.00.00.0Goodwill0.00.00.00.0Accounts Payable and Accrued Expenses(77.57)0.00.0(77.57)(77.57)Current Portion of Long term Debt0.00.00.00.0Advances from Officers(0.09)0.0(0.02)(0.10)(0.09)Due To Parties/Affiliates(2.12)0.00.0(2.12)(2.12)Trade Payable 0.00.00.00.0Income Tax(0.07)0.0(0.01)(0.08)(0.07)Pension or Post retirement liabilities0.00.00.00.0Contingent Liability0.00.00.00.0Other current liabilities(227.19)0.00.0(227.19)(227.19)Deferred Income Tax Liability0.00.00.00.0Long term debt0.00.00.00.0Loan Payable0.00.00.00.0Stock contingency0.0(0.80)(0.80)0.0Cash contingency0.0(0.76)(0.76)0.0Accrued Expenses (Long-Term)(21.91)0.00.0(21.91)(21.91)Other Noncurrent Liabilities(29.12)0.00.0(29.12)(29.12)Common Stock(873.18)(2.00)1.60(2.80)(876.38)(875.18)Cummulative Earnings0.00.00.00.0Revaluation Surplus0.00.00.00.0Share premium(14.66)0.00.0(14.66)(14.66)Other Equity(6.09)0.00.0(6.09)(6.09)Stock option issued0.00.00.00.0Retained Earnings(1,742.07)(7.42)5.95(0.23)(1,743.77)(1,749.49)Treasury share1,630.780.00.01,630.781,630.78NCI0.00.0(0.38)(0.38)0.0Total0.000.0018.55(18.55)0.00

Assumptions made:On January 1, 2014, Grang Plaza Hotel acquires 80% of Northern Star's outstanding stockby paying 1700 cash, 1400 of prepayments, 873.90 of receivables and 1000 worth of othernon-current assets. Also, GPH Company, issued 100000 common stock with a fair value of 45and a cash and stock contingency worth 300 and 270 respectively.

CONSIDERATION TRANSFERRED:The amount of consideration transferred was computed by deducting the required bargain purchase gain of the problem amounting to 580.35411from the net valuation of assets and liabilities which amounts to 1904.04300 which will lead to 1323.68889. This amount then will be addedto the total share holder's equity of the acquiree amounting to 9420.215 and will give a total consideration amounting to 10743.90389

GRAND PLAZA HOTEL AND SUBSIDIARYCONSOLIDATED INCOME STATEMENTDECEMBER 31,2014Sales644.04Less: Cost of Sales117.79Gross Profit526.25Less: ExpensesSelling General and Administrative Expenses214.53General and Administrative Expenses199.53414.06INCOME BEFORE TAX(IN MILLION)112.19

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