Answered: Accounting question: if a company is…

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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Accounting question: if a company is acquired another company at the end of 2021 for $1Billion, and is paying for this acquisition using $700Million in term loans and $200 Million in equity issuance, and $100 Million in a revolver draw (I'm assuming this would be like a line of credit), what figures on the income statement, balance sheet and cashflow statements would I need to adjust if i'm preparing 2022 pro forma statements?

So what line items do i need to adjust any by how much? taking into account the new equity issuance and type of debt, as well as outstanding shares, everything that will be impacted.

Please give a detailed response. Especially how i would adjust shareholders' equity

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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