Reference no: EM132829981

Clark Company's stockholders' equity as of December 31, 2015 is P7,308,000. On January 1, 2016 Clark acquires 30% of Rome Company's ordinary shares for P540,000 cash and by issuing its own shares with fair value of P1,350,000. Clark acquired significant influence over Rome as a result of the stock acquisition. After four months, Clark purchases another 60% of Rome's ordinary shares for a cash payment of P3,942,000. On this date, Rome report is identifiable assets which carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and a fair value of P3,240,000.

• At the acquisition date, net loss reported by Rome for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. Clark also paid the following: P90,000 for legal fees, P72,000 for finder's fee, P77,400 for accountant's fee, P64,800 for audit fee for SEC registration of stock issued and P19,800 for printing of stock certificates.

Problem 1: Immediately after the business combination, how much is the consolidated total equity?