Reference no: EM132935173

On February 1, DFS Corp. agreed to purchase 100% of the voting shares of LKJ Corp. for the following consideration:

• cash of $400,000
• equipment with a net book value of $200,000 and estimated fair value of $270,000
• 50,000 voting shares of DFS, currently trading for $5 per share
• DFS incurred the following costs associated with the acquisition:
• legal fees of $25,000
• appraisal costs (equipment appraisal) of $2,000

Problem 1: What value should be used for the consideration transferred to acquire LKJ?

a) $920,000

b) $922,000

c) $945,000

d) $947,000