Rivendell Corporation and Foster Company merged as of January 1,20X9.To effect the merger,Rivendell paid finder's fees of $40,000,legal fees of $13,000,audit fees related to the stock issuance of $10,000,stock registration fees of $5,000,and stock listing application fees of $4,000.
-Based on the preceding information,under the acquisition method,what amount relating to the business combination would be expensed?

Question

Quizplus · Accepted Answer

According to the acquisition method, only the costs directly associated with issuing and registering the stock should be expensed as part of the business combination. Therefore, the expenses that should be expensed are the audit fees related to the stock issuance of $10,000, stock registration fees of $5,000, and stock listing application fees of $4,000, for a total of $19,000 (option B). The finder's fees and legal fees, although related to the merger, are not directly associated with the stock issuance and should not be expensed as part of the business combination. Therefore, the correct answer is option C.

Rivendell Corporation and Foster Company Merged as of January 1,20X9