Grace Inc. purchase Charm Inc. Their condensed balance sheets before combination show: Grace Charm Book Value Fair Value ASSETS 14,000,000 1,750,000 1,900,000 Liabilities 9,975,000 614,000 Ordinary Share, P100 par 5,250,000 875,000 Share Premium 436,000 Retained Earnings (deficit) -1,225,000 -175,000 Liabilities and SHE 14,000,000 1,750,000 Grace issued its own debt and equity securities as a consideration for the net identifiable asset of Charm. Grace incurred P50,000 in issuing its P600,000 par bonds and P60,000 in issuing its P500,000 par shares of stock. Grace bonds is currently selling at 97 while its share of stock is at 120. How much is the total liabilities? What is the amount of goodwill (gain on acquisition) to be recognized by Grace?
Grace Inc. purchase Charm Inc. Their condensed
Grace Charm
Book Value Fair Value
ASSETS 14,000,000 1,750,000 1,900,000
Liabilities 9,975,000 614,000
Ordinary Share, P100 par 5,250,000 875,000
Share Premium 436,000
Liabilities and SHE 14,000,000 1,750,000
Grace issued its own debt and equity securities as a consideration for the net identifiable asset of Charm.
Grace incurred P50,000 in issuing its P600,000 par bonds and P60,000 in issuing its P500,000 par shares of stock. Grace bonds is currently selling at 97 while its share of stock is at 120.
How much is the total liabilities? What is the amount of
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