AC Energy Corp. would like to acquire an additional subsidiary involved in renewable energy. Informationabout the top four potential acquirees were gathered. You would like to decide which entity to acquire basedUnoDosTresQuatroMarket Value of EquityNet Operating Income - 202110,000,000 P10,200,000 P9,750,000 P10,500,0001st Quarter510,000.0 P505,000.0 P480,000.0 P550,000.02nd Quarter530,000.0525,000.0 P450,000.0 P530,000.0Annual Operating Income2,000,000.0 P2,040,000.0 P1,890,000.0 P2,270,000.0Net Operating Income - 20221st Quarter500,000520,000490,000550,0002nd Quarter490,000510,000500,000570,000istribut370,000Net Income - 20211st Quarter335,000345,000445,000CELE2nd Quarter390,000355,000315,000425,000Annual Net Income1,440,0001,360,0001,350,0001,850,000Net Income - 20221st Quarter360,000350,000355,000o445,0002nd Quarter350,000340,000365,000465,000Provide the under/(over) valuation of the entity to be acquired.

The price-to-earnings ratio (P / E) is related to the company's price and earnings per share. A high…

Answered: 2nd Quarter 350,000 340,000 365,000…

Business

Accounting

2nd Quarter 350,000 340,000 365,000 465,000 Provide the under/(over) valuation of the entity to be acquired.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

AC Energy Corp. would like to acquire an additional subsidiary involved in renewable energy. Information
about the top four potential acquirees were gathered. You would like to decide which entity to acquire based
Uno
Dos
Tres
Quatro
Market Value of Equity
Net Operating Income - 2021
10,000,000 P
10,200,000 P
9,750,000 P
10,500,000
1st Quarter
510,000.0 P
505,000.0 P
480,000.0 P
550,000.0
2nd Quarter
530,000.0
525,000.0 P
450,000.0 P
530,000.0
Annual Operating Income
2,000,000.0 P
2,040,000.0 P
1,890,000.0 P
2,270,000.0
Net Operating Income - 2022
1st Quarter
500,000
520,000
490,000
550,000
2nd Quarter
490,000
510,000
500,000
570,000
istribut
370,000
Net Income - 2021
1st Quarter
335,000
345,000
445,000
CELE
2nd Quarter
390,000
355,000
315,000
425,000
Annual Net Income
1,440,000
1,360,000
1,350,000
1,850,000
Net Income - 2022
1st Quarter
360,000
350,000
355,000o
445,000
2nd Quarter
350,000
340,000
365,000
465,000
Provide the under/(over) valuation of the entity to be acquired.

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(1) Goodwill Calculation: Goodwill is the excess of the purchase consideration transferred over the fair value of the identifiable net assets acquired. Goodwill = Purchase Consideration - Fair Value of Identifiable Net Assets Purchase Consideration = Fair value of Black's investment + Fair value of non- controlling interest Purchase Consideration (21,000,000 + 21,000) + 11,800,000 Identifiable Net Assets = (40,000 + 3,890 +6,280 +2,570) (2,480 + 10,000) Goodwill (21,021,000) + 11,800,000-(52,740) Goodwill = 32,768, 260-52,740 Goodwill = 32,715, 520 Explanation: Goodwill arising on the acquisition of white is RM 32, 715,520 Can you do it in a debit credit format?
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