Salazar Corporation issued 100,000 shares of P28.50 par ordinary shares for all the outstanding shares of Pine Enterprises on August 5, 2019. It also paid cash of P30,000 at the acquisition date and transferred used equipment with a carrying value of P50,000 and a current value of 70% thereof. Salazar’s ordinary stock was selling at P30 when the business combination was consummated. Out of pocket costs for the acquisition follows: Finder’s fee 50,000 Accountants’ fee (advisory) 10,000 Legal fees (advisory) 20,000 Indirect acquisition costs 5,000 SEC registration costs and fees 12,000 If Salazar Corporation is a non-SME, the acquisition cost of the combination will be:
Salazar Corporation issued 100,000 shares of P28.50 par ordinary shares for all the outstanding shares of Pine Enterprises on August 5, 2019. It also paid cash of P30,000 at the acquisition date and transferred used equipment with a carrying value of P50,000 and a current value of 70% thereof. Salazar’s ordinary stock was selling at P30 when the business combination was consummated. Out of pocket costs for the acquisition follows: Finder’s fee 50,000 Accountants’ fee (advisory) 10,000 Legal fees (advisory) 20,000 Indirect acquisition costs 5,000 SEC registration costs and fees 12,000 If Salazar Corporation is a non-SME, the acquisition cost of the combination will be:
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 22PC
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Salazar Corporation issued 100,000 shares of P28.50 par ordinary shares for all the outstanding shares of Pine Enterprises on August 5, 2019. It also paid cash of P30,000 at the acquisition date and transferred used equipment with a carrying value of P50,000 and a current value of 70% thereof. Salazar’s ordinary stock was selling at P30 when the business combination was consummated.
Out of pocket costs for the acquisition follows:
|
Finder’s fee |
50,000 |
|
Accountants’ fee (advisory) |
10,000 |
|
Legal fees (advisory) |
20,000 |
|
Indirect acquisition costs |
5,000 |
|
SEC registration costs and fees |
12,000 |
If Salazar Corporation is a non-SME, the acquisition cost of the combination will be:
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