ON DATE OF BUSINESS COMBINATION: December 31, 2010

· 100% ownership by Post acquired for P 1.3 Million

· Fair Value & Carrying Value FV CV Excess
Inventories 526,000 500,000 26,000
Plant assets 1,290,000 1,100,000 190,000
Patent 30,000 30,000
1,846,000 1,600,000 246,000

SUBSEQUENT TO BUSINESS COMBINATION: December 31, 2011

· Dividends declared P40,000 on Nov. 24 & paid on Dec. 16
· Net income for the year P90,000
· Details of Diff bet Fair Value & Carrying Value
Inventories (FIFO) 26,000
Plant assets
Land 60,000
Building (econ life 20 years) 80,000 4,000.00
Machinery (econ life 5 years) 50,000 190,000 10,000.00
Patent (econ life 6 years) 30,000 5,000.00
Total 246,000

SUBSEQUENT TO BUSINESS COMBINATION: December 31, 2012

· Dividends declared P50,000 on Nov. 22 & paid on Dec. 17
· Net income for the year P105,000
 Balance Sheet Post Sage WPEE 1 WPEE 2 WPEE 3 Conso
Assets
Cash 75,000.00 100,000.00 175,000
Inventories 800,000.00 500,000.00 26,000 1,326,000
Other current assets 542,250.00 215,000.00 757,250
Investment in Sage Company CS 1,300,000.00 (969,000) (246,000) (85,000) -
Plant assets 3,500,000.00 1,100,000.00 190,000 4,790,000
Patent 30,000 30,000
Goodwill 85,000 85,000
6,217,250.00 1,915,000.00 (969,000.00) - - 7,163,250
Liabilities & SHE
Liabilities (2,550,000.00) (946,000.00) (3,496,000)
Common stock, P1 par (1,057,000.00) (1,057,000)
Common stock, P10 par (400,000.00) 400,000 -
APIC (1,560,250.00) (235,000.00) 235,000 (1,560,250)
Retained Earnings (1,050,000.00) (334,000.00) 334,000 (1,050,000)

(6,217,250.00) (1,915,000.00) 969,000.00 - - (7,163,250)

WPEE 1: C/S 400,000

APIC 235,000
R/E 334,000
Investment in Sage 969,000

WPEE 2: Inventories 26,000

Plant Assets 190,000
Patent 30,000
Investment in Sage 246,000

WPEE 3: Goodwill 85,000

Investment in Sage 85,000
 Post Sage WPEE 1 WPEE 2 WPEE 3 WPEE 4 WPEE 2.1 Conso
Income Statement
Net sales (5,611,000.00) (1,089,000.00) (6,700,000)
Cost of goods sold 3,925,000.00 700,000.00 26,000 4,651,000
Operating expenses 556,000.00 129,000.00 19,000 704,000
Other expenses 710,000.00 170,000.00 880,000
Dividend income (40,000.00) 40,000 -
Net income (460,000.00) (90,000.00) - - - 40,000.00 45,000.00 - - (465,000)

Statement of Changes in Equity

RE, beg (1,050,000.00) (334,000.00) 334,000 (1,050,000)
Net income (460,000.00) (90,000.00) (465,000)
Dividends declared 158,550.00 40,000.00 (40,000) 158,550
RE, end (1,351,450.00) (384,000.00) 334,000.00 - - (40,000.00) - - - (1,356,450)

Balance Sheet
Assets
Inventories 861,000.00 439,000.00 26,000 (26,000) 1,300,000
Other current assets 639,000.00 371,000.00 1,010,000
Investment in Sage Company CS 1,300,000.00 (969,000) (246,000) (85,000) -
Plant assets 3,600,000.00 1,150,000.00 190,000 (14,000) 4,926,000
Patent 30,000 (5,000) 25,000
Goodwill 85,000 85,000
Total assets 6,400,000.00 1,960,000.00 (969,000.00) - - - (45,000.00) - - 7,346,000

Liabilities & SE
Liabilities (2,431,300.00) (941,000.00) (3,372,300)
Common stock, P 1 par (1,057,000.00) (1,057,000)
Common stock, P 10 par (400,000.00) 400,000 -
APIC (1,560,250.00) (235,000.00) 235,000 (1,560,250)
Retained Earnings (1,351,450.00) (384,000.00) (1,356,450)
Total liabilities & SE (6,400,000.00) (1,960,000.00) 635,000.00 - - - - - - (7,346,000)

WPEE 1: C/S 400,000

APIC 235,000
R/E 334,000
Investment in Sage 969,000

WPEE 2: Inventories 26,000 WPEE 2.1 COGS 26,000

Plant Assets 190,000 Inventory 26,000
Patent 30,000 Operating expenses 14,000
Investment in Sage 246,000 Plant Assets 14,000
Operating expenses 5,000
WPEE 3: Goodwill 85,000 Patent 5,000
Investment in Sage 85,000

WPEE 4: Dividend Income 40,000

R/E, dividends 40,000
 Post Sage WPEE 1 WPEE 2 WPEE 3 WPEE 2.1 WPEE 2.2 WPEE 2.3 WPEE 4 Conso
Income Statement
Net sales (5,464,750.00) (1,104,000.00) (6,568,750.00)
Cost of goods sold 3,925,000.00 700,000.00 4,625,000.00
Operating expenses 556,000.00 129,000.00 14,000 5,000 704,000.00
Interest & income tax expense 710,000.00 170,000.00 880,000.00
Dividend income (50,000.00) 50,000 -
Net income (323,750.00) (105,000.00) - - - - 14,000.00 5,000.00 50,000.00 (359,750.00)

Statement of Changes in Equity

RE, beg (1,351,450.00) (384,000.00) 334,000 26,000 14,000 5,000 (1,356,450.00)
Net income (323,750.00) (105,000.00) (359,750.00)
Dividends declared 158,550.00 50,000.00 (50,000) 158,550.00
RE, end (1,516,650.00) (439,000.00) (1,557,650.00)

Balance Sheet
Assets
Inventories 861,000.00 439,000.00 26,000 (26,000) 1,300,000.00
Other current assets 801,700.00 426,000.00 1,227,700.00
Investment in Sage Company CS 1,300,000.00 (969,000) (246,000) (85,000) -
Plant assets 3,600,000.00 1,150,000.00 190,000 (28,000) 4,912,000.00
Patent 30,000 (10,000) 20,000.00
Goodwill 85,000 85,000.00
Total assets 6,562,700.00 2,015,000.00 7,544,700.00

Liabilities & SHE

Liabilities (2,428,800.00) (941,000.00) (3,369,800.00)
Common stock, P 1 par (1,057,000.00) (1,057,000.00)
Common stock, P 10 par (400,000.00) 400,000 -
APIC (1,560,250.00) (235,000.00) 235,000 (1,560,250.00)
Retained Earnings (1,516,650.00) (439,000.00) (1,557,650.00)

Total liabilities & SE (6,562,700.00) (2,015,000.00) (7,544,700.00)

WPEE 1: C/S 400,000

APIC 235,000
R/E 334,000
Investment in Sage 969,000

WPEE 2: Inventories 26,000 WPEE 2.1 R/E, beg 26,000

Plant Assets 190,000 Inventories 26,000
Patent 30,000 WPEE 2.2 R/E, beg 14,000
Investment in Sage 246,000 Operating expenses 14,000
Plant assets 28,000
WPEE 3: Goodwill 85,000 WPEE 2.3 R/E, beg 5,000
Investment in Sage 85,000 Operating expenses 5,000
Patent 10,000
WPEE 4: Dividend income 50,000
R/E, dividends 50,000
ON DATE OF BUSINESS COMBINATION: December 31, 2010
· 80% ownership by Post acquired for P 1.04 Million
· Fair Value & Carrying Value FV CV Excess
Inventories 526,000 500,000 26,000
Plant assets 1,290,000 1,100,000 190,000
Patent 30,000 30,000
1,846,000 1,600,000 246,000
· 20% Non Controlling Interest has FMV of 250,000

SUBSEQUENT TO BUSINESS COMBINATION: December 31, 2011

· Dividends declared P40,000 on Nov. 24 & paid on Dec. 16
· Net income for the year P90,000
· Details of Diff bet Fair Value & Carrying Value
Inventories (FIFO) 26,000
Plant assets
Land 60,000
Building (econ life 20 years) 80,000 4000
Machinery (econ life 5 years) 50,000 190,000 10000
Patent (econ life 6 years) 30,000 5000
Total 246,000

SUBSEQUENT TO BUSINESS COMBINATION: December 31, 2012

· Dividends declared P50,000 on Nov. 22 & paid on Dec. 17
· Net income for the year P105,000
 Balance Sheet Post Sage WPEE 1 WPEE 2 WPEE 3
Assets
Cash 335,000 100,000
Inventories 800,000 500,000 26,000
Other current assets 542,250 215,000
Investment in Sage Company CS 1,040,000 (775,200) (196,800) (68,000)
Plant assets 3,500,000 1,100,000 190,000
Patent 30,000
Goodwill 75,000
6,217,250 1,915,000 (775,200) 49,200 7,000
Liabilities & SHE
Liabilities (2,550,000) (946,000)
Common stock, P1 par (1,057,000)
Common stock, P10 par (400,000) 400,000
APIC (1,560,250) (235,000) 235,000
Retained Earnings (1,050,000) (334,000) 334,000
Non-controlling interest (193,800) (49,200) (7,000)

(6,217,250) (1,915,000) 775,200 (49,200) (7,000)

WPEE 1: C/S 400,000

APIC 235,000
R/E, beg 334,000
Investment in Sage 775,200
NCI, beg 193,800

WPEE 2 Inventories 26,000

Plant assets 190,000
Patent 30,000
Investment in Sage 196,800
NCI, beg 49,200

WPEE 3 Goodwill 75,000

Investment in Sage 68,000
NCI, beg 7,000

Computation for goodwill/gain on BPPage Sage Total

Acq cost 1,040,000 1,040,000
NCI @FV 250,000 250,000
Total 1,040,000 250,000 1,290,000
FMVNIA 972,000 243,000 1,215,000
Adjustment 68,000 7,000 75,000
Conso

435,000
1,326,000
757,250
-
4,790,000
30,000
75,000
7,413,250

(3,496,000)
(1,057,000)
-
(1,560,250)
(1,050,000)
(250,000)
-
(7,413,250)
 Post Sage WPEE 1 WPEE 2
Income Statement
Net sales (5,611,000.00) (1,089,000.00)
Cost of goods sold 3,925,000.00 700,000.00
Operating expenses 556,000.00 129,000.00
Other expenses 710,000.00 170,000.00
Dividend income (32,000.00)
Net income (452,000.00) (90,000.00) - -

Allocation of Net Income

Parent (452,000.00) (72,000.00) - -
Non-controlling interest (18,000.00) - -

Statement of Changes in Equity

RE, beg (1,050,000.00) (334,000.00) 334,000
Net income allocated to Parent shareholders (452,000.00) (90,000.00)
Dividends declared 158,550.00 40,000.00
RE, end (1,343,450.00) (384,000.00)

Non-controlling interest, beg (193,800) (49,200)

Net income allocated to NCI
Dividends declared
Non-controlling interest, end

Balance Sheet
Assets
Inventories 861,000.00 439,000.00 26,000
Other current assets 891,000.00 371,000.00
Investment in Sage Company CS 1,040,000.00 (775,200) (196,800)
Plant assets 3,600,000.00 1,150,000.00 190,000
Patent 30,000
Goodwill
Total assets 6,392,000.00 1,960,000.00

Liabilities & SE
Liabilities (2,431,300.00) (941,000.00)
Common stock, P 1 par (1,057,000.00)
Common stock, P 10 par (400,000.00) 400,000
APIC (1,560,250.00) (235,000.00) 235,000
Retained Earnings (1,343,450.00) (384,000.00)
Non-controlling interest
Total liabilities & SE (6,392,000.00) (1,960,000.00)

Reconciliation of NCI and SHE of Sage 20%

Common Stock (400,000.00)
APIC (235,000.00)
RE (384,000.00)
(1,019,000.00) (203,800.00) % share in BV of Subsidiary
Unamortize excess of FMV over cost
Inventory -
Plant Assets (190,000.00) (38,000.00)
Patent (30,000.00) (6,000.00)
(1,239,000.00)
20%
(247,800.00)
Goodwill, share of NCI - -
NCI (Equity), end (247,800.00) (247,800.00)
 WPEE 3 WPEE 4 WPEE 2.1 WPEE 2.2 WPEE 2.3 Conso

(6,700,000)
26,000 4,651,000
14,000 5,000 704,000
880,000
32,000 -
- 32,000 26,000 14,000 5,000 (465,000)

- 32,000.00 20,800.00 11,200.00 4,000.00 (456,000)

- 5,200.00 2,800.00 1,000.00 (9,000)

(1,050,000)
(456,000)
(40,000) 158,550
(1,347,450)

(7,000) (250,000)
(9,000)
8,000 8,000
(251,000)

(26,000) 1,300,000
1,262,000
(68,000) -
(14,000) 4,926,000
(5,000) 25,000
75,000 75,000
7,588,000

(3,372,300)
(1,057,000)
-
(1,560,250)
(1,347,450)
(251,000)
(7,588,000)

WPEE 1: C/S 400,000

APIC 235,000
R/E, beg 334,000
Investment in Sage 775,200
NCI, beg 193,800

WPEE 2 Inventories 26,000 WPEE 2.1 COGS

 Plant assets 190,000 Inventories
Patent 30,000 WPEE 2.2 Operating expenses
Investment in Sage 196,800 Plant assets
NCI, beg 49,200 WPEE 2.3 Operating expenses
Patent
WPEE 3 Goodwill 75,000
Investment in Sage 68,000
NCI, beg 7,000

WPEE 4 Dividend Income 32,000

NCI, dividends 8,000
R/E, dividends 40,000
26,000
Inventories 26,000
14,000
Plant assets 14,000
5,000
5,000
 Post Sage WPEE 1
Income Statement
Net sales (5,464,750.00) (1,104,000.00)
Cost of goods sold 3,925,000.00 700,000.00
Operating expenses 556,000.00 129,000.00
Interest & income tax expense 710,000.00 170,000.00
Interco inv income (40,000.00)
Net income (313,750.00) (105,000.00) -

Allocation of Net Income

Parent (313,750.00) (84,000.00)
Non-controlling interest (21,000.00)

Statement of Changes in Equity

RE, beg (1,343,450.00) (384,000.00) 334,000
Net income (313,750.00) (105,000.00)
Dividends declared 158,550.00 50,000.00
RE, end (1,498,650.00) (439,000.00)

Non-controlling interest, beg (193,800)

Net income allocated to NCI
Dividends declared
Non-controlling interest, end

Balance Sheet
Assets
Inventories 861,000.00 439,000.00
Other current assets 1,043,700.00 426,000.00
Investment in Sage Company CS 1,040,000.00 (775,200)
Plant assets 3,600,000.00 1,150,000.00
Patent
Goodwill
Total assets 6,544,700.00 2,015,000.00

Liabilities & SHE

Liabilities (2,428,800.00) (941,000.00)
Common stock, P 1 par (1,057,000.00)
Common stock, P 10 par (400,000.00) 400,000
APIC (1,560,250.00) (235,000.00) 235,000
Retained Earnings (1,498,650.00) (439,000.00)
Non-controlling interest
Total liabilities & SE (6,544,700.00) (2,015,000.00)

WPEE 1: C/S 400,000

APIC 235,000
R/E, beg 334,000
Investment in Sage
NCI, beg

WPEE 2 Inventories 26,000

Plant assets 190,000
Patent 30,000
Investment in Sage
 NCI, beg

WPEE 3 Goodwill 75,000

Investment in Sage
NCI, beg

WPEE 4

Dividend income 40,000

NCI, dividends 10,000
R/E, dividends
WPEE 2 WPEE 3 WPEE 4 WPEE 2.1 PARE B Conso

(6,568,750)
4,625,000
19,000 704,000
880,000
40,000 -
- - 40,000 19,000 - (359,750)

40,000 15,200 (342,550)

3,800 (17,200)

- 36,000 10,000 (1,347,450)

(342,550)
(50,000) 158,550
(1,531,450)

(49,200) (7,000) - 9,000 (10,000) (251,000)

(17,200)
10,000 10,000
(258,200)

26,000 (26,000) 1,300,000

1,469,700
(196,800) (68,000) -
190,000 (28,000) 4,912,000
30,000 (10,000) 20,000
75,000 75,000
7,776,700

(3,369,800)
(1,057,000)
-
(1,560,250)
(1,531,450)
(258,200)
(7,776,700)

775,200
193,800
WPEE 2.1 NCI, beg 5,200
R/E, beg 20,800
Inventories 26,000
NCI, beg 2,800
196,800 R/E, beg 11,200
49,200 Operating expenses 14,000
Plant assets 28,000
NCI, beg 1,000
68,000 R/E, beg 4,000
7,000 Operating expenses 5,000
Patent 10,000

PARE B R/E, beg 10,000

384,000 NCI, beg 10,000
334,000
50,000
50,000 10,000
1,347,450.00

251,000.00

1,598,450.00 - - - - -