Use the following information to answer this question A business whose assets consisted of stock N15,000 and debtors N8,000 was bought by issuing 20,000 ord...

Answer Details

The purchase consideration is the amount paid by the buyer to acquire the business. In this case, the business was bought by issuing 20,000 ordinary shares of N1 each at a premium of 20 percent. The total amount of shares issued can be calculated as follows: 20,000 shares x N1 per share = N20,000 The premium on the shares can be calculated as follows: 20 percent x N20,000 = N4,000 Therefore, the total purchase consideration is the sum of the value of the shares and the premium on the shares, which is: N20,000 + N4,000 = N24,000 Therefore, the purchase consideration is N24,000.