1.
On December 31, 2015, Honest Corporation enters
into a business combination by acquiring the assets and assuming the
liabilities of Kind corporation. In
effect Kind corporation will be dissolved. Honest transferred the following to
Kind Corporation:
a.
20,000 unissued shares of its P10 par common
stock, with a market value of P25 per share;
b.
P180,000 in long-term 8% notes payable, and
c.
A contingent payment of P 120,000 cash on
January 1, 2018, if the average income during the 2-year period of 2016-2017
exceeds P 300,000 per year. Honest estimate that there is a 60% chance or probability that the P 120,000
payment will be required.
In addition, Honest pays the following at the time of the
merger:
