Answered: The cost of registering equity…

Business

Accounting

The cost of registering equity securities in a business combination should be recorded as

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter6: Investing And Financing Activities

Section: Chapter Questions

Problem 3Q

See similar textbooks

Related questions

Q: How is the investor’s share of gross profit on intra-entity sales calculated? Under the equity…

A: The share of investor is calculated in the following manner in an intra-entity sale: Investor's…

Q: One of the primary reasons for investing in equity securities includes a. Receiving dividend…

A: Investments refers to the process of using the currently held excess cash to earn profitable returns…

Q: If the employee has the choice as to whether the settlement is in cash or by issuance of equity…

A: The question is related to IFRS 2 Share based payment.

Q: What documents would a company need to correctly account for its investment securities, and what…

A: Investment Securities: Investment securities can be stated as those securities that are acquired…

Q: prepares separate financial statements

A: Correct Answer is :- A at cost

Q: Explain how underwriting costs and accounting and legal fees associated with the issuance of stock…

A: Underwriting: A process of providing guarantee to the issuing company to compensate in case of…

Q: When an entity issues a financial instrument, it has to determine its classification either as debt…

A: The financial instrument is a contractual agreement of cash inflows and inflows. If it is not right…

Q: Which of the following is/are true about accounting for business combinations when stock is issued…

A: Accounting treatment for expenses in business combinations: When a company acquires…

Q: The proprietary theory, the entity theory, and the funds theory are three approaches to accounting…

A: Sole Proprietor It is the form of business in which one person is the manager and also the owner of…

Q: Whichever of the below offers the most potential for allowing the investor to use off-balance-sheet…

A: Balance sheet: The balance sheet shows the financial position of the company by recording all the…

Q: The total market value of the firm's equity is determined by Select one: O a. the firm's accountants…

A: Total market value of a stock is calculated as the price of the stock trading and the number of…

Q: When holding held-to-maturity securities, a company should disclose at each balance sheet date the…

A: We shall answer the first question since the exact question wasn't specified. Please resubmit a new…

Q: share-based payment transaction provides that the employees have the right to choose the settlement…

A: Share based payment is an agreement between organization and other party ( including employees)…

Q: Matching type. Match these 4 investments into its corresponding definition below 1. Investment in…

A: The "investment in subsidiary" will be reported as an asset by the parent business, which will be…

Q: Consider the following statements. I. In applying the Equity Method of accounting for investments in…

A: Equity method: This method is an accounting technique that a company uses to record the profits that…

Q: 1. What is an intercorporate share investments? a) Significance Influence b) Financial Assets vs…

A: Investments are the resources that the entity or individual has when capital is allocated for a…

Q: IFRS requires companies to measure their financial assets at fair value except when based on: a.…

A: IFRS or International Financial Reporting Standards are accounting strategies that are applicable in…

Q: Cost to Issue Equity Securities to Effect a Business Combination Search the FASB ASC database to…

A: Introduction:- A share of capital stock that represents a shareholder's ownership stake in a firm,…

Q: What are the four different methods of accounting for investment? Please concisely explain the four…

A: As multiple questions are given, we will answer three question. Methods of accounting for investment…

Q: ng and Reporting Topic: Issuance of Share Capital

A: Ordinary shares provide share in the ownership of the company The profit comes through capital…

Q: Explain the concepts of business acquisitions, mergers and consolidation of financial statements.

A: The merger or acquisition of smaller companies into large business entities is known as…

Q: How does a company determine whether to account for an equity investment using the fair value…

A: Financial Management: In layman’s words, financial management is the management of the finance or…

Q: Investments in equity instruments are financial assets because they are Group of answer choices…

A: Solution: As per IAS, Financial assets are those assets that is: 1. Cash 2. an equity instrument of…

Q: If a company uses the equity method to account for an investment in another company, which of the…

A: The equity method is used when a company has ownership in another company of 20% to 50% of the…

Q: What are the different financial risks in business acquisition and combination?

A: Financial risk is the risk that the company has overpaid or has got more leverage than required or…

Q: Which one of the following journal entries is correct when payment for share issue expenses are…

A: There are three golden rules in accounting for recording the transaction : Debit what comes in ,…

Q: f the employee has the choice as to whether the settlement is in cash or by issuance of equity…

A: A Compound Financial Instrument is an instrument that has the characteristic of both an equity and…

Q: Describe the equity method and the cost method of investor accounting for acquisitions

A: When there is some acquisition is made in some other business or some part of control is purchased,…

Q: Choose the correct. Under fair-value accounting for an equity investment, which of the following…

A: Under fair value accounting change in the value of investment will be recognized as the change in…

Q: What are the two primary ways companiesraise common equity?

A: The mix of equity and debt in a business organization is known as the capital structure of the…

Q: Write a note on Three primary means companies use to offer securities to the general public?

A: Securities are the tradeable financial instruments that are bought and sold in the financial markets…

Q: Explain the concepts of business acquisitions, mergers and consolidation of financial statements…

A: The concepts of business mergers, acquisitions, and consolidation are discussed with a view to…

Q: The costs of legal, promotional, and accounting services necessary to effect the sale of shares are…

A: Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for…

Q: Expenses in acquiring another company may be related to the issuance of stocks , legal , financial…

A: The expenses are treated in the books in the following ways: - Issuance of Stock: The entry for…

Q: Based on which of the following concepts, is share capital account shown on the liability side of a…

A: Business entity concept says that both businessmen and business are separate person. Business has…

Q: According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a…

A: In the equity method, investments are 1st recorded at cost and later adjusted based on the changes…

Q: Explain what method is used to account for investments in equity securities with 20% to 50%…

A: Investments in equity securities with 20% to 50% ownership, the investor is said to have significant…

Q: The two sources of financing available to businesses are known as Multiple Choice common and…

A: Deffinition: Every company needs money to expand their business. For expansion of business companies…

Q: How are intra-entity transfers reported in an investee’s separate financial statements if the…

A: Equity method: Equity method is the method used for accounting equity investments which claim a…

Q: When using the equity method of accounting, when is revenue recorded on the books of the investor…

A: Investment in stock for significant influence: The investments in stock securities which claim…

Q: Determine the fair value of consideration transferred on the business combination? How many shares…

A: solution given Number of ABC co’s share 60000 Par value per share 40 Fair value of…

Q: Describe the accounting for bonds payable, including bonds issued at face amount, bonds issued at a…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: method, an investment in associate or joint venture is initially and subsequently measured at…

A: Answer - Option B Initial measurement - Cost Subsequent measurement- Cost, adjusted for the investor…

Q: When shares are issued in exchange of legal services in order to incorporate an entity, the proper…

A: Company means a form of business where the share holder invest money in business in form of shares…

Question

The cost of registering equity securities in a business combination should be recorded as

Definition Definition Amount of return a company generally pays to its equity investors. The cost of equity represents the compensation required by the market in lieu of owning the asset firm and simultaneously bearing the risk of ownership.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The cost of registering equity securities in a business combination should be capitalized debited to share premium expensed
For investments in equity securities, which will result in recording income based on the income of the investee? Select one: a. Held-to-maturity classification b. Trading classification O C. Available-for-sale classification O d. Equity method of accounting
Briefly discuss how a transfer of securities from the available-for-sale category to the trading category affectsstockholders’ equity and income.
Distinguish between the accounting treatment for marketable versus nonmarketable equity securities.
Explain how the investment account is affected byinvestee activities under the equity method.
Explain how the following items affect equity: revenue, expenses, investments by owners, and distributions to owners.
How the equity method accounting rules work?
Describe how to report equity securities with controlling influence.
Trading securities, by definition, are properly classified in the statement of financial position as: Select one: O a. Shareholders' equity O b. Other assets O c. Intangibles O d. Current assets
Answer the following questions: Define and discuss the term "equity" What financial statement element, other than equity, is typically affected by owner investments and distributions?
What is dilutive securities, and where is it located at on the financial statements?
Investments in equity securities are classified in one of three different ways, based on ownership percentage. Identify the three ways and the characteristics of each, including how the accounting differs ??