[nepcpa]

Becker Question –

cpa-06936, Damon Co. purchsed 100% of the the CS of smith in an acquistion by issuing 20,000 shares of its$1 par common stock that had a fair value of $10 per share and providing contingent consideration that had a fair value of $ 10000 on acquisition da. Damon also incurred $15000 in direct acquisition costs. on the acquisition date, smith had assets with a book value of $200000 and fair value of $350000 and related liabiities with book and fair value $70000. what amout of gain should Damon report related to this transiction?

Answer is $70,000.

I don’t understad why the acquisiton cost of $15000 is deducted twice?

thanks in advance for your response.