Bale Co. incurred $100,000 of acquisition costs related to the purchase of the net assets of Dixon Co. The $100,000 should be: A. Allocated on a pro rata basis to the nonmonetary assets acquired. B. Capitalized as part of goodwill and tested annually for impairment. C. Capitalized as an other asset and amortized over five years. D. Expensed as incurred in the current period.

Question

Business

Giles

2 October, 09:44

Bale Co. incurred $100,000 of acquisition costs related to the purchase of the net assets of Dixon Co. The $100,000 should be: A. Allocated on a pro rata basis to the nonmonetary assets acquired. B. Capitalized as part of goodwill and tested annually for impairment. C. Capitalized as an other asset and amortized over five years. D. Expensed as incurred in the current period.

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Mimi · Answer 1

D. Expensed as incurred in the current period.

Explanation:

Since in the question it is given that the acquisition cost incurred for $100,000 which is related to the purchase of the net assets

And, the same $100,000 is reported as an expenses incurred for the current period as other cost like professional fees, consulting fees, general administrative cost expenses, etc are recorded when they are incurred

Hence, the last option is correct