Rivendell Corporation and Foster Company merged as of January 1, 20X9. To effect the merger, Rivendell paid
Question:
Rivendell Corporation and Foster Company merged as of January 1, 20X9. To effect the merger, Rivendell paid finder's fees of $40,000, legal fees of $13,000, audit fees related to the stock issuance of $10,000, stock registration fees of $5,000, and stock listing application fees of $4,000.
1. Based on the preceding information, under the acquisition method, what amount relating to the business combination would be expensed?
$72,000
$19,000
$53,000
$63,000
2. Based on the preceding information, under the acquisition method:
$72,000 of stock issue costs are treated as goodwill.
$19,000 of stock issue costs are treated as a reduction in the issue price.
$19,000 of stock issue costs are expensed.
$72,000 of stock issue costs are expensed.
3. Using the preceding information, what amount would have been expensed if the purchase method of accounting was used?
$0
$19,000
$53,000
$72,000
4. Using the preceding information, what amount would have been expensed if the pooling-of-interests method of accounting was used?
$0
$19,000
$53,000
$72,000
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward