Target Inc. has 30 million shares outstanding and trades at $50 per share. Target has net identifiable assets with a book value of $1 billion and a fair value of $1.2 billion. Acquirer Corporation purchases all of Target Inc. stock for $60 per share. How much will Acquirer record as goodwill upon acquiring Target? a. $300 million b. $500 million c. $600 million d. $800 million
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- You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt $3,562 Target Cash and Cash Equivalents $5,147 % Debt Financing 40% % Equity Financing 60% Equity Financing Fees 4.0% Debt Financing Fees 1.5% Other Transaction Costs $800World Enterprises is determined to acquire Intous Ltd through exchanging stocks. World Enterprises is offering R65 per share for Intous ltd. You are given the following information World Enterprises Intous Ltd Net Income R50 R10 Shares outstanding 5000 2000 Earnings per share R10 R5 Market price per share R150 Price earnings ratio R15 a. Calculate the number of shares to be issued by Intous Ltd: b. Calculate combined earnings per share of both World Enterprise and Intous Ltd c. Calculate price earnings ratio (P/E ratio) paid (Hint: use the R65 to calculate the P/E ratio) d. Compare the current and paid P / E ratiosA 135.
- You are given the following information about Target Inc.: Identifiable assets: Carrying amount: $ 540,000 Fair value: $ 485,000 Identifiable Liabilities: Carrying amount: $ 150,000 Fair value: $ 190,000 The total number of shares issued by Target is 20,000, at an average market price of $23 per share. Consider two scenarios: 1) Shell Inc. is set up to acquire Target, and buys for cash 100% of the issued share capital of Target for $ 510,000. 2) Shell buys an 82% stake in Target, thus acquiring a majority interest. The price paid is now $425,000. Assume that the tax rate is 0, so that you can ignore any deferred tax considerations. REQUIRED: A) Calculate the value of goodwill at acquisition date for the two scenarios, using both the full and partial method of goodwill in scenario 2). B) Provide all of the consolidation entries at the date of acquisition (not only those related to the elimination…On January 1, 2020, MNO Company acquired 250,000 ordinary shares of PQR Company at P45 per share.At the time of purchase, PQR Company had outstanding1,000,000 shares with a carrying amount of P30,000,000. The following information pertains to year 2020: Net income of CD Company 3,100,500 MNO Company received cash dividend from PQRCompany 2.50 per ordinary share Market Value of PQR Company's shares 35 MNO Company has no significant influence and has elected irrevocably to measure the investment at fair value through other comprehensive income.How much is the unrealized gain/(loss) on financial asset-OCI at year-end?can u please help
- If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par value shares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash and paying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. Compute for the Consolidated Total Assets at the date of acquisition.Please help meFirm A is being acquired by Firm B for $62,000 worth of Firm B stock. The incremental value of the acquisition is $4,300. Firm A has 2,700 shares of stock outstanding at a price of $22 a share. Firm B has 10,400 shares of stock outstanding at a price of $31 a share. What is the actual cost of the acquisition using company stock?
- Direction: Analyze the case and give what is asked. On January 2, 20X1, Entity X purchases 75% of the common stock of Entity Y for P250,000. Entity Y has P200,000 and P50,000 common stock and retained earnings, respectively. On December 31, 20X1, Entity X sold equipment to Entity Y for P80,000. The equipment generally costs Entity X P120,000 when purchased four (4) years ago. Moreover, it is depreciated over its life of 10 years using the straight-line method with no residual value. The companies have the following data for years 20X1 and 20X2: Entity X Items 20X1 20X2 Dividends Paid Comprehensive Income from Own Operation Р38,000 147,000 Р60,000 159,000 Entity Y Items 20X1 20X2 Dividends Paid to X P22,500 50,000 P31,500 74,000 Comprehensive Income from Own Operation Required: 1. Prepare the necessary journal and elimination entries that should be made in 20X1 and 20X2 about the sale of equipment. Follow the steps in the handout. 2. Allocate the consolidated comprehensive income for…On January 1, 2024, Clor-Proell Enterprises bought 20% of the outstanding common stock of Chen Construction Company for $600 million cash. Chen's net income for the year ended December 31, 2024, was $300 million. During 2024, Chen declared and paid cash dividends of $60 million. Clor-Proell recorded the investment as follows: PURCHASE General Journal Investment in Chen Construction shares Cash NET INCOME ($ in millions) Debit Credit 600 600 Investment in Chen Construction shares (20% x $300 million) 60 Investment revenue 60 DIVIDENDS Cash (20% x $60 million) 12 12 Investment in Chen Construction shares Required: What would be the pretax amounts related to the investment that Clor-Proell would report in its statement of cash flows for the year ended December 31, 2024? Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. Operating activities $ 600 Investing activities $ 60 Financing activities $ 12Delaney Company sells, for $280,000, a 40% of the shares it owns in Hunter Company. The carrying value of the Equity Investment relating to these shares is $240,000 on the date of sale. The journal entry to record the sale assuming Delaney keeps control over Hunter includes: Select one: A. Equity investment, debit, $240,000 B. Gain, credit, $40,000 C. APIC, credit, $40,000 D. Equity investment, credit, $280,000
