Prepare a balance sheet for Pop Corporation as of January 2, 2016, immediately after the merger, assuming the merger is treated as an acquisition.
Q: When we are preparing consolidated financial statements, will we have to eliminate the parent…
A: The parent company will report the investment in subsidiary as it's asset in books of accounts. But…
Q: In the business combination of Polka and Spot Select one: a. all of the costs except those of…
A: Common acquisition-related costs addressed in Business Combinations are: Legal Accounting and due…
Q: On January 1, 2018, Dermot Company purchased 12% of the voting common stock of Horne Corp. On…
A: Accounting for investments involves recording and reporting the value and income of an entity's…
Q: bove, was prepared immediately before this transaction. Provide the Investor Company's balances…
A: A balance sheet is an accounting report that shows a corporation's assets liabilities, and…
Q: On January 1, 2025, Vaughn Corporation purchased 20% of the common shares of Bramble Company for…
A: Since, Vaughn purchased 20% shares in the Bramble company, the share of dividend and net income will…
Q: Peer Company acquired of the common stock of Sight Company on January 1, year one, for On that date,…
A: Consolidation is the process of integrating the financial accounts of a parent business and its…
Q: Company Y purchases a controlling interest in Company Z on January 1, 2019. Which of the following…
A: Ans. C Company Y's Shareholders' Equity as well as Company Y's proportional share ofCompany Z's net…
Q: In 2018, PepsiCo, Inc. acquired SodaStream, a sparkling water maker, for $6,686 million in cash. At…
A: Merger:-It is a combination of two companies to form a new single legal entity with a new name or…
Q: Assume that you own 110 shares of common stock of a company, that you have been receiving cash…
A: Since you have asked multiple question we can solve only first question please repost the question…
Q: Company A acquires Company B on May 1, 2016. Please prepare the journal entry to record…
A: Merger & Acquisition: Mergers occur when two different organizations unite their efforts in…
Q: COMBINED CORPORATE ENTITIES AND CONSOLIDATIONS
A: Bronze Corporation Statement showing net…
Q: Use the following facts for Multiple Choice problems 28 and 29: Assume on January 1, 2022, the…
A: AcquisitionWhen a company purchases the majority of shares or all the shares of another company and…
Q: Following are separate financial statements of Michael Company and Aaron Company as of December 31,…
A: a.
Q: fair value of the net assets held by XYZ Corp at the date of combination
A: Fair value of net assets = Fair value of assets - Fair value of liabilities
Q: Following are separate financial statements of Michael Company and Aaron Company as of December 31,…
A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…
Q: psons aujo be a pas de send us aedade
A: #Note It has been assumed that only requirement A is required to answer. The Additional paid in…
Q: Outlook Inc. merges with Pinnacle Inc. Only Pinnacle remains. Refer to Fact Pattern 31-1.…
A: Mergers and acquisitions (M&A) are corporate strategies or financial transactions in which one…
Q: ABC Company acquired XYZ Company in an acquisition. What date should be used as the acquisition date…
A: Acqusition Acqusition which is describe as the purchase the control of over another companies shares…
Q: On January 1, 2024, Presidio Company acquired 100 percent of the outstanding common stock of Mason…
A: Investment in Associates and Joint venture and Subsidiary Equity Accounting method - This method is…
Q: Stanley works and Black & Deckers announced their merger on November 02, 2009. How antitrust laws…
A: Antitrust laws, additionally referred to as competition laws, are a collection of legal restrictions…
Q: When one company buys the assets and liabilities of another company, this is known as which of the…
A: Corporation: It can be defined as a legal entity that has a separate existence from its owners.
Q: Required Information [The following information applies to the questions displayed below] On April…
A: The treasury stock decreases the total shareholders' equity. the sale of treasury stock increases…
Q: On January 1, 2018, PNB and Allied Bank entered into a contract of merger wherein PNB will issue…
A: PNB and Allied Banks
Q: On January 1, 2022, a Parent company has a debt outstanding that was originally issued at a discount…
A: If the debt was purchased at a premium, there will be a gain or loss from the constructive…
Q: On January 5, 2018 Johnson Co. announced their planned acquisition of Smith Co. The following is a…
A: A business combination occurs when an entity acquires control over an organization. Generally, the…
Q: Discuss the impact on consolidated financial statements of a midyear acquisition.
A: Consolidated financial statements are the financial statements of a group in which the assets,…
Q: On January 1, 2025, Windsor Corporation purchased 20% of the common shares of Sheridan Company for…
A: Investments in equity securities are ownership interests (stocks or shares) that one corporation has…
Q: Benjamin Inc. and Victor Inc. agreed to combine as of January 1, 2023. The book value and fair value…
A: Investment in Associates and Joint venture and Subsidiary Equity Accounting method - This method is…
Q: On January 1, 2025, Ayayai Corporation purchased 40% of the common shares of Pina Company for…
A: When significant influences (20% to 50%) is acquired by investor over investee, equity method of…
Q: At what point during an acquisition does the acquiring firm's shareholders stand the most to gain?…
A: The company is said to be an acquirer when it purchases more than 50% shares of the target company.…
Q: In Bell Group's consolidation worksheet, the opening balance of retained earnings under 'group'…
A: Consolidation is the process of joining together smaller businesses, assets, or operations to form a…
Q: Examples of two or more companies that have gone through merger and acquisition in most recent years
A: Merger and acquisitions refer to the process where one company combines with another. In a merger,…
Q: account balance. Assume that nt of downstream intra-entity profits against its share of Sheridan's…
A: The Investment in Sheridan account balance can be determined by considering the various transactions…
Q: What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following: Total…
A: Pre-acquisition and Post Acquisition profits: Pre-acquisition profits are the reserves that exist in…
Q: On July 1, 2025, Pronghorn Corporation purchased Young Company by paying $252,100 cash and issuing a…
A: Journal Entry is the primary step to record the transaction in the books of accounts. The increase…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
- On June 1, 2018, Bramble Company and Sunland Company merged to form Coronado Inc. A total of 761,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.On April 1, 2020, the company issued an additional 652,000 shares of stock for cash. All 1,413,000 shares were outstanding on December 31, 2020.Coronado Inc. also issued $600,000 of 20-year, 7% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 40 shares of common at any interest date. None of the bonds have been converted to date.Coronado Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,390,000. (The tax rate is 20%.)Determine the following for 2020.(a) The number of shares to be used for calculating: (1) Basic earnings per share (2) Diluted earnings per share (b) The earnings figures to be used for calculating:…Intra-group transaction Question (worksheet adjustment entries for the following independent transactions) Sydney Ltd owns all of the shares of Mel Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019. Assume an income tax rate of 30%. (a) SYD Ltd sold inventory to MEL Ltd on 1 September 2018 for $30 000. This inventory had cost SYD Ltd $18 000. One-third of the inventory was sold by Mel Ltd to QLD Ltd for $14 000 and one-third to ADL Ltd for $14 200. (b) SYD Ltd manufactures certain items which it then markets through MEL Ltd. During the current period, SYD Ltd sold items for $60 000 to MEL Ltd at cost plus 20%. MEL Ltd has sold 75% of these transferred items at 30 June 2019. (c) During June 2019, MEL Ltd declared a $3000 dividend. The dividend was paid in August 2020. (d) In…Stock acquisition (fair value is different from book value) The following financial statement information is for an investor company and an investee company on January 1, 2022. On January 1, 2022, the investor company's common stock had a traded market value of $28 per share, and the investee company's common stock had a traded market value of $21 per share. Book Values Fair Values Investor Investee Investor Investee Receivables & inventories $192,000 $96,000 $180,000 $86,400 384,000 192,000 420,000 240,000 432,000 192,000 480,000 249,600 160,000 153,600 $1,008,000 $480,000 $1,240,000 $729,600 $288,000 $153,600 $320,000 $164,000 40,000 32,000 536,000 275,200 144,000 19,200 $1,008,000 $480,000 $720,000 $326,400 $920,000 $565,600 Land Property & equipment Trademarks & patents Total assets Liabilities Common stock ($1 par) Additional paid-in capital Retained earnings Total liabilities & equity Net assets Assume that the investor company issued 30,000 new shares of the investor company's…
- 46. Consolidation at the end of the first year subsequent to date of acquisition-Equity method (purchase price equals book value) Assume a parent company acquires its subsidiary on January 1, 2022, by exchanging 30,000 shares of its $1 par value Common Stock, with a market value on the acquisition date of $17 per share, for all of the outstanding voting shares of the acquiree. You have been charged with preparing the consolidation of these two companies at the end of the first year. On the acquisition date, all of the subsidiary's assets and liabilities had fair values equaling their book values. The parent uses the equity method of pre-consolidation Equity investment bookkeeping. Following are financial statements of the parent and its subsidiary for the year ended December 31, 2022. LO2 XAcquisition Entries, Acquisition Costs, Bargain Gain Plastic Corporation is contemplating a business combination with Steel Corporation at December 31, 2021. Steel's condensed balance sheet on that date appears below: Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Total assets Liabilities and Stockholders' Equity Liabilities Common stock Retained earnings Total liabilities and equity Cash and receivables Inventory Equity method investments Land Description Buildings and equipment Patents Goodwill Liabilities Required Prepare the journal entry to record the business combination of Plastic and Steel for each of the following acquisition costs and combination methods. (a) Plastic acquires Steel as a merger for $250,000 cash. Other direct cash acquisition costs are $20,000. General Journal Description Cash and receivables Inventory Equity method investments. Land Liabilities Cash Buildings and equipment Patents ÷ Description (b) Plastic…What important issues should management consider prior to a merger or acquisition? What are the current GAAP requirements for the type of merger/acquisition?
- Need help with the following questions please. One company that the analysis indicated as potentially suitable for acquisition by Admiral isFavorite Food Systems Inc. Favorite Food Systems Inc. which was founded by John Favorite in 1994, is a WestCoast chain with current annual sales of approximately $75 million. n 2003, the company went public.(The Favorite family now controls about 57 percent of the common stock.) 1. Calculate the pre-merger earnings per share for Admiral and Favorite and the pre-merger price-to-earnings (P/E) ratio for each company (based on the stated prices per share). 2. Calculate three additional exchange ratios of Admiral shares for each share of Favorite. Assume a 15%, 20%, and 25% premium price per share over the stated Favorite price of $15 per share. 3. Calculate the Admiral Foods post-merger income statement and earnings per share, assuming an exchange ratio of 0.45.Several years ago, Bennett, Inc., bought a portion of the outstanding bonds of Smith Corporation, a subsidiary organization. The acquisition was made from an outside party. In the current year, how should these intra-entity bonds be accounted for within the consolidation process?Explain how purchase accounting is implementedin a merger. Does the accounting profession nowrequire this method? How is any premium that theacquiring firm paid over the acquired firm’s bookvalue treated subsequent to a merger?
- (i) ABC Company’s management decides to list its shares on a stock exchange for the first time. List and briefly discuss the type of shares they could list and their characteristics. (ii) List and explain three reasons why managers would consider merging with another company. Provide as an example one recent merger case (worldwide) and suggest what the motive for this merger was.Winsor Inc. recently purchased Holiday Corp., a large midwestern home painting corporation. One of the terms of the merger was that if Holiday's income for 2020 was $110,000 or more, 10,000 additional shares would be issued to Holiday's stockholders in 2021. Holiday's income for 2019 was $120,000. Instructions a. Would the contingent shares have to be considered in Winsor's 2019 earnings per share computations? b. Assume the same facts, except that the 10,000 shares are contingent on Holiday's achieving a net income of $130,000 in 2020. Would the contingent shares have to be considered in Winsor's earnings per share computations for 2019?Effects on consolidated financial statements of acquisition of affiliate's debt from non-affiliate On January 1, 2022, a Parent company has a debt outstanding that was originally issued at a discount and was purchased, on issuance, by an unaffiliated party. On January 1, 2022, a Subsidiary of the Parent purchased the debt from the unaffiliated party. The debt was purchased by the Subsidiary at a slight premium. The Parent is a calendar year company. Which one of the following statements is true? The consolidated balance sheet at December 31, 2022 will report none of the debt, and the consolidated income statement for the year ended December 31, 2022 will report a gain or loss from constructive retirement of the debt and will not report any interest expense from the debt. The consolidated balance sheet at December 31, 2022 will report the debt, and the consolidated income statement for the year ended December 31, 2022 will not report any interest expense from the debt. The consolidated…