(Answers that are Multiples (x) or Percents (%) should be carried to 1 decimal place or 2 if indicated) Question to answer in reference to the balance sheet: A. Did New Chip Corp make any acquisitions? B. Briefly, how do you know?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Assets
Cash
Receivables (net)
Inventory
PP & E (net)
Patents&Licenses
Goodwill
Total assets
Liabilities & Equity
Accounts payable
Short term debt
Long term debt
Preferred stock
Common Equity
Total Liabilities + Equity
New Chip Corp Balance Sheet at 12/31/22
($ in Millions)
31
45
64
215
28
19
402
53
19
179
23
128
402
Transcribed Image Text:Assets Cash Receivables (net) Inventory PP & E (net) Patents&Licenses Goodwill Total assets Liabilities & Equity Accounts payable Short term debt Long term debt Preferred stock Common Equity Total Liabilities + Equity New Chip Corp Balance Sheet at 12/31/22 ($ in Millions) 31 45 64 215 28 19 402 53 19 179 23 128 402
(Answers that are Multiples (x) or Percents (%) should be carried to 1 decimal place or 2
if indicated)
Question to answer in reference to the balance sheet:
A. Did New Chip Corp make any acquisitions? B. Briefly, how do you know?
Transcribed Image Text:(Answers that are Multiples (x) or Percents (%) should be carried to 1 decimal place or 2 if indicated) Question to answer in reference to the balance sheet: A. Did New Chip Corp make any acquisitions? B. Briefly, how do you know?
Expert Solution
Step 1

Acquisition is when a company purchases most of shares of other company in exchange of consideration.

Difference between net assets acquired and purchase consideration is call Goodwill in cash of higher purchase consideration or capital reserve in case of lower purchase consideration.

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