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On January 4, 2017, Abbott acquired all of the outstanding stock of St. Jude Medical, in...

On January 4, 2017, Abbott acquired all of the outstanding stock of St. Jude Medical, in exchange for $13.6 billion in cash and $10.0 billion in Abbott stock. Referring to Abbott’s 2017 financial statements and its 2016 press release announcing the acquisition, answer the following questions regarding the St. Jude Medical acquisition.

What accounting method was used, and for what amount, to record the acquisition?

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Answer #1

Abbott Lab used Purchase method for recording the acquisition of St. Jude Medical

The acquisition was completed in Jan 2017 for a price of $23.6 billion.

Notes

Purchase method is the standard method used now a days to record a company being acquired.

Please comment in case of any issue and I will be happy to help.

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