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Determining The Amount of Consideration Transferred

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Hoyt Corporation agreed to the following terms in order to acquire the net assets of Brown Company on January 1, 2009:
(1.) To issue 400 shares of common stock ($10 par) with a fair value of $45 per share.
(2.) To assume Brown's liabilities which have a fair value of $1,500.
On the date of acquisition, the consideration transferred for Hoyt's acquisition of Brown would be?

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Solution Summary

This solution illustrates how to compute the amount of consideration transferred when the net assets of a corporation are purchased for stock and the acquirer assumes the acquired company's debt.

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The consideration transferred in an acquisition is the sum of the fair market value of the assets given up plus the ...

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