Question: During 2005 eBay acquired four different companies In the schedule

During 2005, eBay acquired four different companies. In the schedule below, the acquired companies are listed with the aggregate purchase price and with the estimated acquisition-related costs (dollars in thousands).

1. What are acquisition-related costs and how should eBay account for these costs?
2. Compute the ratio of acquisition-related cost to the purchase price of the acquisition for each acquired company with available information.
3. Record the journal entries made on eBay’s books on February 23, 2005 when they acquired (include entries for the acquisition and acquisition-related costs).
4. eBay acquired Skype on October 14, 2005. EBay’s year-end is December 31, 2005, how many months of Skype’s revenues and expenses can eBay include in its income statement for 2005?
5. eBay acquired various websites when it acquired International classified websites. The excess of the purchase price over the fair value of net tangible assets and identifiable intangible assets was $71,771 thousand (or approximately 88% of the purchase price). What does this amount represent and why is this not unusual for an acquisition of thistype?

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