A company acquires the assets and liabilities of another company. The fair value of the acquired companys
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A company acquires the assets and liabilities of another company. The fair value of the acquired company’s identifiable net assets is $5,000,000. The acquisition transaction includes the following:
$5,000,000 in cash paid to the former owners of the acquired company
150,000 new shares of stock with a market value $45/share. Registration fees, paid in cash, were $1,000,000.
$4,000,000 in cash paid to the underwriter for consulting services
Earnings contingency with an expected present value of $3,000,000 at the date of acquisition
Prepare the acquisition entry to be made by the acquiring company.
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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