What total purchase price will Chagret Company record after incurring legal and advisory fees during its acquisition?

The total purchase price that Chagret Company will record is determined by the fair value of the acquired assets and any liabilities assumed, along with direct acquisition-related costs such as legal and advisory fees. Legal and advisory fees are typically considered part of the transaction costs and can influence the total outlay required for the acquisition.

In this scenario, if the total purchase price without considering any additional costs is determined to be $130 million, the company will record that amount as the acquisition cost. Typically, additional costs like legal and advisory fees do not increase the recorded purchase price of the acquired entity, as they are generally expensed as incurred rather than added to the purchase consideration.

Therefore, if the fair value of the acquisition itself stands at $130 million and other transaction costs do not contribute to the capitalized cost of the acquisition, then $130 million is correctly identified as the total purchase price recorded by Chagret Company. The other mentioned amounts likely include estimates of those additional costs, which, while impacting the overall expenditure for the acquisition, do not alter the recorded purchase price of the acquired business itself.