RR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000.

RR’s balance
sheet immediately after the combination contained the following balances: (see image 1) DD’s balance
sheet at acquisition contained the following balances: (see image 2) On the date of combination, the
inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a
value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was
liquidated and its assets and liabilities were brought onto DD’s books. compute the balance of Buildings
and Equipment, net to be reported in the consolidated balance sheet immediately after the acquisition

Bldgs & equip. (net), RR 350,000.00

Bldgs & equip. (net), DD 375,000.00
Total bldgs & equipments 725,000.00