Question

On August 31 of the current year, Pine Corp. issued 100,000 shares of its $20 par value common stock for all of the net assets of SAP, Inc., in a business combination. The fair value of Pine's common stock on the acquisition date was $36 per share. Pine paid a fee of $160,000 to the consultant who arranged this acquisition. Costs of registering and issuing the equity securities amounted to $80,000. No goodwill or gain on a bargain purchase was involved. What amount should Pine record for the net assets acquired?

Answer 1

Answer:

C. $3,600,000

Explanation:

Calculation to determine What amount should Pine record for the net assets acquired?

Using this formula

Net assets = shares Issued *Faiir value of common stock on the acquisition date

Let plug in the formula

Net assets= 100,000* $36 per share

Net assets=$3,600,000

Therefore the amount that Pine should record for the net assets acquired is $3,600,000