Question

An acquiring company issues 500,000 shares of $6 par value common stock to acquire 100% of the voting common stock of an investee company in a transaction that qualifies as a business combination. The market value of the acquiring company's common stock is $30 per share. Direct legal and consulting fees incurred pursuant to the combination are $200,000. Direct registration and issuance costs for the acquiring company's common stock are $50,000. The transaction did not result in goodwill recognition or bargain gain recognition. What is the total amount of net assets recognized as a result of this business combination

Answer 1

the total amount of net asset recognized is $15,000,000

Step-by-step explanation:

The computation of the total amount of net asset recognized is shown below:

= Number of shares issued × per share

= 500,000 shares × $30

= $15,000,000

Hence, the total amount of net asset recognized is $15,000,000

We simply multiplied the above two items