Ecol Corporation issued voting preferred stock with a fair value of $1,000,000 in exchange for all of the outstanding common stock of Ogee Service Company. Ogee has tangible net assets with a book value of $500,000 and a fair value of $600,000. In addition, Ecol Corporation issued stock valued at $100,000 to an investment banker as a "finder's fee" for arranging the combination. As a result of this combination Ecol Corporation should record an increase in net assets of $500,000. b. $600,000. C. $1,100,000. d. $1,000,000. a. 48. On August 31, Year 3, Wood Corp. issued 100,000 shares of its $20 par value common stock for the net assets of Pine, Inc., in a business combination accounted for by the purchase method. The market value of Wood's common stock on August 31 was $36 per share. Internal secretarial and administrative costs of $60,000 are indirectly attributable to the acquisition. Costs of registering and issuing the equity securities amounted to $80,000. No goodwill was involved in the purchase. What amount should Wood capitalize as the cost of acquiring Pine's net assets? $3,600,000 b. $3,680,000 c. $3,760,000 d. $3,840,000 a. a. 49. A business combination is accounted for properly as a purchase. Direct costs of combination, other than registration and issuance costs of equity securities, should be Capitalized as a deferred charge and amortized, b. Deducted directly from the retained earnings of the combined corporation. C. Expensed in the period incurred.. d. Included in the acquisition cost to be allocated to identifiable assets according to their fair values.

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