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Compute the cost at which spider should record

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Question - On January 1, 2019, Spider paid $10,000 in cash and issued 300 shares of its $10 par value common stock to the owners of Kendall Company to acquire all of Kendall's common stock. On that date, Spider's shares had a fair value of $40 per share. Spider also agreed to pay an additional amount of cash to Kendall's shareholders on January 1, 2020 if Spider's net income for 2019 exceeds $10,000. The probability-adjusted present value of that payment is $3,430. Finally, Spider paid $2,500 in brokerage fees and $3,500 in legal fees related to this acquisition. Compute the cost at which Spider should record this investment.

Reference no: EM132641888

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