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Lela Company purchases all of the outstanding shares of another company. The acquiring company incurs the following costs to make this purchase: $300,000 to outside accountants and attorneys as direct consolidation costs, $200,000 as a reasonable allocation of internal costs attributed to this purchase, $120,000 in stock issuance costs in connection with shares issued by the acquiring company to the owners of the acquired company. What amount of these costs should be expensed immediately as incurred?

a) Zero

b) $200,000

c) $500,000

d) $620,000

Accounting Basics, Accounting

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