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Determine the total cost of the business combination

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Question - On 31 January 2018 A Ltd has 100 shares in issue. On 1 January 2019 A Ltd issued 200 new shares to the owners of B Ltd in exchange for all of B Ltd's shares. Identify the acquirer and justify your answer. (5 marks) A Ltd acquires 75% of entity B in exchange for Ksh.85,000,000 cash and 1,000,000 of its shares (fair value = Ksh.10,000,000) issued for the transfer. A Ltd incurred Ksh.5,000,000 advisory and legal costs directly attributable to the business combination and Ksh.1,000,000 share issue expenses.

Required - Determine the total cost of the business combination.

Reference no: EM132608766

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