NAGA VIPER Corp. and HABANERO Co.

have announced terms of an exchange agreement

under which NAGA VIPER will pay P450,000 cash for a 100% interest of HABANERO. In
addition, NAGA VIPER Corp. incurred P90,000 for finder’s fee. Book value and fair value
balance sheet data on January 1, 2020, are as follows:
NAGA VIPER Corp. HABANERO Company
Balance sheet item Book value Fair value Book value Fair value

Cash P150,000 P150,000 P 40,000 P 40,000

Inventory 80,000 100,000 50,000 80,000
Investment 120,000 150,000 80,000 100,000
Land 100,000 170,000 50,000 85,000
Buildings & Equipt. 300,000 400,000 160,000 230,000
Accu. Depreciation ( 80,000) (50,000)___________
Total assets P670,000 P970,000 P330,000 P535,000
Accounts Payable P150,000 P160,000 P 90,000 P100,000
Common stock 200,000 100,000
APIC 20,000 10,000
Retained earnings 300,000 130,000
Total Equities P670,000 P330,000

Required:
a. Journal entries on the books of NAGA VIPER Corporation to record the acquisition.
b. Elimination entry.
c. Prepare a consolidated Balance Sheet