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Question: Fine Ltd acquired all of the issued shares of Ark Ltd.. Fine Ltd issued...

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Accounting

Question: Fine Ltd acquired all of the issued shares of Ark Ltd.. Fine Ltd issued 950,000 shares of Fine Ltd to the shareholders of Ark Ltd. At the acquisition date, the fair value of the ordinary shares of Fine Ltd was $2.65 and the fair value of the ordinary shares of Ark Ltd was $5.00.

Ark Ltd's shareholders' equity on acquisition date consisted of the following:

Issued capital $3,800,000

Retained earnings $1,200,000

What is the cost of acquisition of Fine Ltd?

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