On April $1,2001,$ AAAA Corporation purchased $8,000$ shares of BBBB by issuing P$200,000$ worth of stocks and paid P$360,000.$ The balance sheet of the two entities prior to the date of combination showed the following information:

AAAA

Book Values

Cash

Accounts Receivable

Inventory

Land

Buildings and Equipment

Less: Accumulated Depreciation

Other assets

Short$-$term payables

Long$-$term Payables

Common stock par P$15$

Common stock par P$100$

Additional Paid$-$in Capital

Retained Earnings

P$1,500,000$

$720,000$

$500,000$

$400,000$

$800,000$

$-200,000$

$80,000$

$300,000$

$800,000$

$1,000,000$

$1,000,000$

$700,000$

BBBB

Book Values Fair Values

$\backslash$table$[[$P$60,000,$P$60,000],[100,000,100,000],[70,000,115,000],[50,000,70,000],[550,000,350,000],[-150,000,],[,],[10,000,10,000],[200,000,180,000],[150,000,],[,],[220,000,],[100,000,]]$

Information regarding the regular operations of the two entities are as follows:

$\backslash$table$[[,$AAAA,BBBB$],[,2001,2002,2003,2001,2002,2003],[$Sales$,400,000,520,000,380,000,100,000,120,000,80,000],[$Cost of Sales,$280,000,360,000,240,000,40,000,45,000,35,000],[$Expenses$,50,000,60,000,40,000,25,000,28,000,25,000]]$

The following were also incurred to complete the business combination of the two entities:

Pre$-$acquisition audit fee

$P10,000$

$5,000$

$7,000$

$8,000$

General administrative costs

Other preacquisition costs

Cost SEC registration for stocks issued

Contingent consideration was agreed to be P$50\mathrm{.}000,$ AAAA shares at combination date is selling at $200$ per share. Income, purchases, and expenses throughout each year were evenly earned, purchased, and incurred. All sales are in cash. Expenses and purchases are paid in cash. Purchases every year amounts to P$200,000$ and P$50,000,$ for AAAA and BBBB respectively. The short$-$term payables was paid only in $2003$ since it was refinanced in $2002.$ Receipts from the accounts receivable was in $2003$ due to some new contractual agreements between the company and their debtors in $2002.$ The useful life of AAAA's Property Plant and Eqipment is $20$ years. On the other hand, BBBB$\text{'}$s Property plant and equipment has a remaining life of $20$ years. Acquirer and Acquiree declares annual dividends of $30,000$ and $10,000,$ respectively.

Required:

Prepare the following as of the date combination

a$.$ provide all entries in the books of the acquirer and acquiree

b$.$ make a consolidated statement of financial position

c$.$ provide the working paper eliminating entries

Prepare the following for the year $2001$ and $2002$

a$.$ make a consolidated income statement

b$.$ make a consolidated statement of financial position

c$.$ make a working paper

c$.$ provide the necessary journal entries and working paper eliminating entries.