Operating activities: Operating activities refers to the type of activities the company performs, to generate net income. These are important activities of the business, it generates revenue, and expenses by way of manufacturing, distributing, marketing and selling of products or services. Investment activities: Investing activities are business activities that involve buying and disposing long-lived assets, which is used in operating activity. Buying and selling of land, buildings, machineries, and equipment for use in the business are the examples of investment activities. Financing activities: Financing activities refer to raising funds by way of issuing shares, bonds or to borrow money from bank to meet the financing need of the business, and paying dividends to stockholders, and interest to the lenders. To classify: Each transaction as either on operating activity, investing activity or financing activity or if no cash is exchanged as a non-cash event.

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Chapter 3, Problem 3.21E

To determine

Operating activities:

Operating activities refers to the type of activities the company performs, to generate net income. These are important activities of the business, it generates revenue, and expenses by way of manufacturing, distributing, marketing and selling of products or services.

Investment activities:

Investing activities are business activities that involve buying and disposing long-lived assets, which is used in operating activity. Buying and selling of land, buildings, machineries, and equipment for use in the business are the examples of investment activities.

Financing activities:

Financing activities refer to raising funds by way of issuing shares, bonds or to borrow money from bank to meet the financing need of the business, and paying dividends to stockholders, and interest to the lenders.

To classify: Each transaction as either on operating activity, investing activity or financing activity or if no cash is exchanged as a non-cash event.

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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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