Question
An acquiring company issues 600,000 common shares with a par value of $2.50 to acquire 100% of the voting common shares of an investee company
An acquiring company issues 600,000 common shares with a par value of $2.50 to acquire 100% of the voting common shares of an investee company in a transaction that qualifies as a business combination.
The fair value of the acquiring company's common shares is $12.50 per share.
Direct legal and consulting fees incurred pursuant to the combination are $175,000.
The direct costs of registering and issuing the acquiring company's common stock are $60,000.
The transaction did not result in the recognition of goodwill or the recognition of trading gains.
What is the total amount of net assets recognized as a result of this business combination?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
