Poppy Corporationacquires Stevens Company,paying the owners of Stevens 1,000,000 newshares with a par value of $0.50 per share and afair value of $50 per share at the date ofacquisition. Poppy also incurs cash registrationfees of $100,000 and consulting fees of$700,000. Included in the agreement is acontingency guaranteeing Stevens shareholdersto pay $400,000 if sales increase 5% in thecurrent year. Poppy' contingency is almostcertain and it is valued at $400,000.What is Poppy's reported acquisition cost?

Given that, Poppy issue 1,000,000 shares to stevens. Par value of share = $0.50 Fair value of share…

Answered: Poppy Corporation acquires Stevens…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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