Question
In: Accounting
On October 14, 2005, eBay acquired all of the outstanding securities of Skype Technologies S.A. (“Skype”),...
On October 14, 2005, eBay acquired all of the outstanding securities of Skype Technologies S.A. (“Skype”), for a total initial consideration of approximately $2.6 billion, plus potential performance based payments of approximately $1.3 billion (based on the euro–dollar exchange rate at the time of the acquisition and using an income approach to estimating the value of the earnout). The initial consideration of approximately $2.6 billion was comprised of approximately $1.3 billion in cash and 32.8 million shares of eBay’s common stock. For accounting purposes, the stock portion of the initial consideration was valued at approximately $1.3 billion based on the average closing price of eBay common stock surrounding the acquisition announcement date of September 12, 2005. Prepare the journal entry on eBay’s books to record the acquisition.
Solutions
Expert Solution
Given problem is about acquisition of business.
Here we have to show the entry for acquisition of business in
the books of acquiring company.
ekkarill92 answered 3 months agoRelated Solutions
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