Par Co. Incurred the following costs in order to acquire all of the shares of Sub Co.:• Purchase price (paid in cash) $500,000• Legal fees $10,000The business combination agreement states that if the earnings of Sub Co. exceed an average of $2.50 per share overthe next two years, Par Co. will make an additional cash payment of $100,000 to the former shareholders of Sub Co.Recent earnings per share for Sub Co. have averaged $1.75. On the date of the business combination, it is not knownwhether the earnings target will be met.On the date of the combination, the acquisition cost would be calculated as:Multiple Cholce$500,000$510,000$610,000$600,000

Legal fees and accountant charges, consultation fees and all other fees not included in acquisition…

Answered: Multiple Choice O $500,000 $510,000…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Multiple Choice O $500,000 $510,000 $610,000 $600,000