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What is the cost of the business combination

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Reference no: EM132618066

Problem 1: On 31 March 2019, Blue Ltd purchases 100% of Violet Ltd in exchange for $7,500,000 cash consideration and 21,000,000 ordinary voting shares of Blue Ltd. The cost value of one Blue Ltd share was $3 but the fair value on March 31 is $4. The exchange resulted in Blue Ltd acquiring 20,000,000 of Violet Ltd's ordinary voting shares. The cost value of one Violet Ltd share was $2 but the fair value on March 31 is $3. The incidental legal and accounting fees directly attributable to the acquisition are $300,000. What is the cost of the business combination?

Select one:

Option a. $47,800,000

Option b. $67,500,000

Option c. $67,800,000

Option d. $70,500,000

Option e. $91,500,000

Reference no: EM132618066

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