Pomograte Corporation bought 75% of Sycamore Company's common stock,with a book value of $900,000,on January 2,2011 for $750,000.The law firm of Dewey,Cheatam and Howe was paid $55,000 to facilitate the purchase.At what amount should Pomograte's Investment in Sycamore account be reported on January 2,2011?
A)$675,000
B)$695,000
C)$750,000
D)$845,000

Question

Quizplus · Accepted Answer

Pomograte's Investment in Sycamore should be reported at the purchase price of $750,000, excluding the legal fees, which are expensed separately.

Pomograte Corporation Bought 75% of Sycamore Company's Common Stock,with a Book