On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value of P50 (current fair value is P60). The following are expenses incurred and paid by SG Corporation in connection with the business combination on the date of acquisition: Underwriting costs, P10,000; Consultant's Fees, 20,000; Newspaper publication fees, 5,000; SEC registration fees, 8,000; Stock exchange listing fees, 6,000; Indirect acquisition costs, 12.000. Balance sheet of Popsters shows assets of P2,800,000 and liabilities of P400,000.
On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value of P50 (current fair value is P60). The following are expenses incurred and paid by SG Corporation in connection with the business combination on the date of acquisition: Underwriting costs, P10,000; Consultant's Fees, 20,000; Newspaper publication fees, 5,000; SEC registration fees, 8,000; Stock exchange listing fees, 6,000; Indirect acquisition costs, 12.000. Balance sheet of Popsters shows assets of P2,800,000 and liabilities of P400,000.
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 64P
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18. how much is the capitalized cost of investment?
Transcribed Image Text:On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters
Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value
of P50 (current fair value is P60). The following are expenses incurred and paid by SG
Corporation in connection with the business combination on the date of acquisition:
Underwriting costs, P10,000; Consultant's Fees, 20,000; Newspaper publication fees, 5,000; SEC
registration fees, 8,000; Stock exchange listing fees, 6,000; Indirect acquisition costs, 12,000.
Balance sheet of Popsters shows assets of P2,800,000 and liabilities of P400,000.
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