Reference no: EM132829211

Polly Company's shareholders' equity as of December 31, 2016 is P2,030,000. On January 1, 2017, Polly acquires 25% of Summer Company's ordinary share for P150,000 cash and by issuing its own shares with fair value of P200,000. Polly acquired significant influence over Summer as a result of acquisition. After three months, Polly purchases another 55% of Summer's ordinary share for cash payment of P1,100,000. On this date, Summer reports identifiable assets with carrying value of P1,800,000 and fair value of P3,200,000 and it has liabilities with a book value and fair value of P900,000. At the acquisition date, net income reported by Summer for three-month ended amounted to P500,000. The fair value of 20% NCI is P360,000. NCI is valued using the proportionate basis. Polly also paid the following: P25,000 for broker's fee; P20,000 for pre-acquisition audit fee; P21,500 for legal fees; P18,000 for SEC registration of share issued and P5,500 for printing of share certificates.

Problem 1: Immediately after the business combinations, what is the consolidated total equity of Polly Company?