Stockholders’ equity: The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners. Stockholders’ Equity statement: Stockholders’ equity statement shows the changes made in the stockholders’ equity account and in the total stockholders’ equity during the accounting period. To prepare: A stockholders’ equity statement of Incorporation I, for the year ending December 31, 2016.

Question

Wilson Corporation acquires Greatbatch Company for $80 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows: Balance Sheet (in millions) Wilson Greatbatch Current assets $96 $8 Property and equipment 800 144 Intangibles 32 4.8 Total assets $928 $156.8 Current liabilities $40 $3.2 Long-term debt 640 104 Capital stock 80 19.2 Retained earnings 192 24 Accumulated other comprehensive income (loss) (24) 6.4 Total liabilities and equity $928 $156.8 Greatbatch's property and equipment is overvalued by $48 million, its reported intangibles are undervalued by $32 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $11.2 million. Required Prepare Wilson's balance sheet immediately following the merger. Use a negative sign with your answer for AOCI if the balance is a loss.

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Question

Chapter 11, Problem 11.19EX

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners.

Stockholders’ Equity statement:

Stockholders’ equity statement shows the changes made in the stockholders’ equity account and in the total stockholders’ equity during the accounting period.

To prepare: A stockholders’ equity statement of Incorporation I, for the year ending December 31, 2016.

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Wilson Corporation acquires Greatbatch Company for $80 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows: Balance Sheet (in millions) Wilson Greatbatch Current assets $96 $8 Property and equipment 800 144 Intangibles 32 4.8 Total assets $928 $156.8 Current liabilities $40 $3.2 Long-term debt 640 104 Capital stock 80 19.2 Retained earnings 192 24 Accumulated other comprehensive income (loss) (24) 6.4 Total liabilities and equity $928 $156.8 Greatbatch's property and equipment is overvalued by $48 million, its reported intangibles are undervalued by $32 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $11.2 million. Required Prepare Wilson's balance sheet immediately following the merger. Use a negative sign with your answer for AOCI if the balance is a loss.

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