Books of PARENT CORPORATION

Date Jan 1 , 2010 Particulars INVESTMENT IN SUBSIDIARY CASH Debit 1,437,000 1,437,000 Credit

Books of SUBSIDIARY CORPORATION

Particulars Debit

Dec 31, 2010

DIVIDEND RECEIVABLE or CASH DIVIDEND INCOME

21,000 21,000

RETAINED EARNINGS DIVIDENDS PAYABLE or CASH

26,250

Dec 31, 2011

DIVIDEND RECEIVABLE or CASH DIVIDEND INCOME

157,500 157,500

RETAINED EARNINGS DIVIDENDS PAYABLE or CASH

196,875

Books of SUBSIDIARY CORPORATION

Credit

26,250

196,875

CONSOLIDATION WORKING PAPER

Date Jan 1 , 2010 Particulars ORDINARY SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS INVENTORY EQUIPMENT PATENTS GOODWILL INVESTMENT IN SUBSIDIARY NON-CONTROLLING INTEREST Debit 656,250 262,500 525,000 78,750 131,250 52,500 90,000 1,437,000 359,250 Credit Acquisition Cost Non-Controlling Interest Total Less BVof Subsidiary at acquisition date Excess of AC over BV Excess Allocated as follows: Inventory Equipment Patents Excess allocated to Goodwill NON-CONTROLLING INTEREST at Estimated Fair Value at Proportionate Share CONSOLIDATED BALANCE SHEET As of January 1, 2010 Shareholders' Equity ORDINARY SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS NON-CONTROLLING INTEREST Total Shareholders' Equity 900,000 375,000 750,000 359,250 2,384,250 1,437,000 359,250 1,796,250 1,443,750 352,500 78,750 131,250 52,500

262,500 90,000

359,250 341,250

NON-CONTROLLING INTEREST at Estimated FV = P1,437,000 / 80% x 20% = 359,250 at Proportionate Share BV of Subsidiary Ordinary Share APIC RE Add FV of Identifiable Assets Inventory Equipment Patents Fair Value of Subsidiary Multiply by NCI %

656,250 262,500 525,000 78,750 131,250 52,500

1,443,750

262,500 1,706,250 20%

NCI at Propportionate Share

341,250

CONSOLIDATION WORKING PAPER

Date Dec 31, 2010 Particulars DIVIDEND INCOME NON-CONTROLLING INTEREST RETAINED EARNINGS (Subsidiary) ORDINARY SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS INVENTORY EQUIPMENT PATENTS GOODWILL INVESTMENT IN SUBSIDIARY NON-CONTROLLING INTEREST COST OF SALES (Subsidiary) OPERATING EXPENSES (Subsidiary) INVENTORY ACCUMULATED DEPRECIATION PATENTS NCI-NET INCOME NON-CONTROLLING INTEREST Debit 21,000 5,250 Credit WPEE 1 26,250 656,250 262,500 525,000 78,750 131,250 52,500 90,000 1,437,000 359,250 78,750 23,625 78,750 13,125 10,500 21,525 21,525 375,525 RETAINED EARNINGS (Parent) 65,625 750,000 From TB of Parent NON-CONTROLLING INTEREST 5,250 359,250 WPEE 2 21,525 WPEE 4

Dec 31, 2010

From TB of Parent

684,375 RETAINED EARNINGS (Subsidiary) From TB of Sub 26,250 525,000 From TB of Sub WPEE 2 525,000 26,250 WPEE 1

Dec 31, 2010

INCOME & EXPENSE SUMMARY (Subsidiary) WPEE 3 78,750 210,000 From TB of Sub WPEE 3 23,625 WPEE 4 21,525 86,100 Share of the Parent

Dec 31, 2010

INCOME & EXPENSE SUMMARY (Parent) WPEE 1 21,000 262,500 From TB of Parent CONSOLIDATED BALANCE SHEET As of December 31, 2010 241,500 Own Operations Shareholders' Equity ORDINARY SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS NON-CONTROLLING INTEREST Total Shareholders' Equity 900,000 375,000 1,011,975 375,525 2,662,500 Consolidated Retained Earnings 1,011,975 CONSOLIDATED RETAINED EARNINGS Retained Earnings, Parent Add: Consolidated Net Income NI Parent 241,500 NI Parent's Share 86,100

684,375

327,600

CONSOLIDATION WORKING PAPER

Date Dec 31, 2011 Particulars RETAINED EARNINGS (Parent) NON-CONTROLLING INTEREST RETAINED EARNINGS (Subsidiary) DIVIDEND INCOME NON-CONTROLLING INTEREST RETAINED EARNINGS (Subsidiary) RETAINED EARNINGS (Subsidiary) NON-CONTROLLING INTEREST RETAINED EARNINGS (Parent) ORDINARY SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS INVENTORY EQUIPMENT PATENTS GOODWILL INVESTMENT IN SUBSIDIARY NON-CONTROLLING INTEREST RETAINED EARNINGS (Subsidiary) INVENTORY ACCUMULATED DEPRECIATION PATENTS OPERATING EXPENSES (Subsidiary) ACCUMULATED DEPRECIATION PATENTS NCI-NET INCOME NON-CONTROLLING INTEREST Debit 21,000 5,250 Credit WPEE 1 WPEE 2 26,250 157,500 39,375 196,875 107,625 21,525 86,100 656,250 262,500 525,000 78,750 131,250 52,500 90,000 1,437,000 359,250 102,375 78,750 13,125 10,500 23,625 13,125 10,500 58,275 58,275 233,100 Share of the Parent INCOME & EXPENSE SUMMARY (Subsidiary) WPEE 6 23,625 315,000 From TB of Sub WPEE 7 58,275 801,975 RETAINED EARNINGS (Subsidiary) Current Yr Dividends 196,875 708,750 From TB of Sub WPEE 3 107,625 26,250 WPEE 1 WPEE 4 525,000 196,875 WPEE 2 WPEE 5 102,375 Current Yr Dividends WPEE 1 NON-CONTROLLING INTEREST 5,250 21,525 WPEE 3 39,375 359,250 WPEE 4 58,275 WPEE 7 394,425 RETAINED EARNINGS (Parent) 210,000 946,875 From TB of Parent 21,000 86,100 WPEE 3

Dec 31, 2011

Dec 31, 2011

Dec 31, 2011

Dec 31, 2011

Dec 31, 2011

Dec 31, 2011

INCOME & EXPENSE SUMMARY (Parent) WPEE 2 157,500 231,250 From TB of Parent CONSOLIDATED BALANCE SHEET As of December 31, 2011 73,750 Own Operations Shareholders' Equity ORDINARY SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS NON-CONTROLLING INTEREST Total Shareholders' Equity 900,000 375,000 1,108,825 394,425 2,778,250 CONSOLIDATED RETAINED EARNINGS Retained Earnings, Parent Add: Consolidated Net Income NI Parent 73,750 NI Parent's Share 233,100 Consolidated Retained Earnings 801,975

306,850 1,108,825