AA Inc. purchased all of the net assets of BB Company of January 2, 2019 by issuing
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Question:
The net assets of AA Company have a book value of P150,000 and a fair value of P180,000. BB Company paid P250,000 cash for all the net assets of AA Company. BB Company also paid P50,000 to an investment house as finder's fee. At what amount should goodwill be recorded on AA Company's books?
On June 30, 2019, AA Corporation issued 100,000 shares of its P20 par value common stock for the net assets of BB Company in a business combination accounted for by the acquisition method. The market value of AA's common stock on June 30 was P36 per share. AA paid a fee of P100,000 to the broker who arranged this acquisition. Costs of SEC registration and issuance of the equity securities amounted to P50,000. Contingent consideration determined to be paid to BB Company after acquisition amounts to P120,000. What amount should AA treat as acquisition-related costs to be expensed?
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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