Question 1:

Acquisition cost in a business combination includes the following items, except

Select one:

assets transferred by the acquirer to the former owners of the acquiree.

liabilities incurred by the acquirer and owed to the former owners of the acquiree.

stock issued by the acquirer to the former owners of the acquiree.

cash paid for registration fees on stock issued to the former owners of the acquiree.

Question 2

Company A pays $4,000,000 in cash to acquire Company B on January 1, 2019. Company A also pays $1,000,000 for outside merger advisory services and has an earnout agreement with an expected present value of $2,000,000 as part of the acquisition. What is the total acquisition cost associated with this combination?

Select one:

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Thanks