Miguel Corporation and Forest Company merged as of January 1,20X3.Miguel paid finder's fees of $36,000 and legal fees of $8,000.Miguel also paid audit fees related to the stock issuance of $12,000,stock registration fees of $7,000,and stock listing application fees of $3,000.
-Based on the preceding information,under the acquisition method

Question

Quizplus · Accepted Answer

Under the acquisition method, direct costs associated with the issuance of stock, such as audit fees related to the stock issuance, stock registration fees, and stock listing application fees, are treated as a reduction in the issue price of the stock. In this case, the total of these costs is $12,000 + $7,000 + $3,000 = $22,000.

Miguel Corporation and Forest Company Merged as of January 1,20X3