Questions 15 through 18 are based on the following:

On January 1, 2012, RC Company acquired all the net assets of Wynshel Company in exchange
for 9,000 newly issued common shares of RC Company with a par value of P100 and a market
value of P250. Immediately prior to the purchase combination, on January 1, 2012, the book
values and fair values of Wynshel were presented in the following balance sheet:
Book value Fair value
Cash P 100,000 P 100,000
Inventory 300,000 300,000
Plant and equipment (net) 1,650,000 2,000,000
Total assets P2,050,000 P2,400,000
Notes payable P 200,000 P200,000
Common stock 1,000,000
Excess over par 250,000
Retained earnings 600,000
Total liab. and SHE P2,050,000
As part of the combination plan,