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What is the total amount of the cost of investment

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Reference no: EM132765395

ABC Corp. issued 120,000 shares of P25 par ordinary share for all outstanding shares of XYZ in a business combination consummated on July 1, 2020. ABC's ordinary share was selling at P36 per share at the time of the consummation of the combination. XYZ's net asset is P3.9 million at book value.

Out of pocket expenses of the combination were as follows:

Legal Fees:

For business combination 15,000

For SEC registration 14,000

SEC registration costs 18,000

Printing costs of share certificates 9,000

Finder's fee 28,000

CPA audit fee for SEC registration 12,000

Required:

Question 1. If the combination is treated as acquisition method, what is the total amount of the cost of investment?

Question 2. Assuming ABC Corp. is an SME, what is the total amount of the cost of investment?

Reference no: EM132765395

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