Reference no: EM132644898

Millennium Capital Management, Inc., (MCM) acquired a 90% interest in NextGen, Inc. MCM's Financial Manager, Matthew Steven, has prepared a draft memo to the CFO, Hannah Jordan, advising her on how the company should account for certain aspects of the acquisition. Mr Steven would like you to review the draft memo and make any necessary revisions to comply with generally accepted accounting principles. Using the information from the exhibits in the file attached (Homework SIM 2 DRS simulation.pdf - also in the test instructions), select the option from the list provided that corrects each underlined portion of the memo. If the underlined text is already correct in the context of the document, select from the list.

Problem 1: The fair value of the consideration that MCM transferred to acquire its interest in NextGen is

A. $9,000,000

B. $8,000,000

C. $10,000,000

D. $9,500,000

E. $8,500,000

In consideration for a 90% interest in next gen, mcm issued 100,000.00 shares of its common stock to nextgen shareholders in exchange for 450,000.00 shares of nextgen common stock. This transaction occurred on January 14, 20XX