50.1K

Verified Solution

Link Copied!

please use FASB codification citations to support your answer.

C1-1 Assignment of Acquisition Costs LO 1-2 .1-5 Research Troy Company notified Kline Company's shareholders that it was interested in purchasing controlling ownership of Kline and offered to exchange one share of Troy's common stock for each share of Kline Company submitted by July 31, 20X7. At the time of the offer, Troy's shares were trading for $35 per share and Kline's shares were trading at $28. Troy acquired all of the shares of Kline prior to December 31, 20X7, and transferred Kline's assets and liabilities to its books. In addition to issuing its shares, Troy paid a finder's fee of $200,000, stock registration and audit fees of $60,000, legal fees of $90,000 for transferring Kline's assets and liabilities to Troy, and $370,000 in legal fees to settle litigation brought by Kline's shareholders who alleged that the offering price was below the per-share fair value of Kline's net assets. Required Troy Company's vice president of finance has asked you to review the current accounting literature, including authoritative pronouncements, and prepare a memo reporting the required treatment of the additional costs at the time Kline Company was acquired. Support your recommendations with citations and quotations from the authoritative financial reporting standards or other literature C1-1 Assignment of Acquisition Costs LO 1-2 .1-5 Research Troy Company notified Kline Company's shareholders that it was interested in purchasing controlling ownership of Kline and offered to exchange one share of Troy's common stock for each share of Kline Company submitted by July 31, 20X7. At the time of the offer, Troy's shares were trading for $35 per share and Kline's shares were trading at $28. Troy acquired all of the shares of Kline prior to December 31, 20X7, and transferred Kline's assets and liabilities to its books. In addition to issuing its shares, Troy paid a finder's fee of $200,000, stock registration and audit fees of $60,000, legal fees of $90,000 for transferring Kline's assets and liabilities to Troy, and $370,000 in legal fees to settle litigation brought by Kline's shareholders who alleged that the offering price was below the per-share fair value of Kline's net assets. Required Troy Company's vice president of finance has asked you to review the current accounting literature, including authoritative pronouncements, and prepare a memo reporting the required treatment of the additional costs at the time Kline Company was acquired. Support your recommendations with citations and quotations from the authoritative financial reporting standards or other literature

Answer & Explanation Solved by verified expert

See Answer