Question

Peanut Butter Corporation and Jelly Company merged as of January 1st 2019. To effect the merger Peanut Butter paid commission fees of $45,000, legal fees of $110,000 related to contract negotiations, stock registration fees of $80,000, asset valuation fees of $50,000, travel cost $25,000, audit fees not required for stock issuance of $75,000 and legal fees for due-diligence of $110,000. Based on the preceding information under the Acquisition Method what amount relating to the business combination would be deferred stock issuance costs?

Answer 1

Solution

The Value provided in the question are:

Commission Fees : $45000, Legal Fees : $110000, Stock registration fees : $80000,  Asset valuation fees : $50000, Travel cost $25000, Audit fees :$75000, Legal Fees for due-diligence : $110000

deferred Stock issuance cost include as follow:

Commission Fees $45000

Legal Fees $110000

Stock Registration Fess $80000

Assets Valuation Fees $50000

Travel Cost $25000

Audit Fees --

Legal Fees for Due - Diligence --

Total   $310000

Hence Deferred stock Issunace cost is $310000