On December 31, Year 1, P Company purchased 90% of the outstanding shares of S Company for $8,100 cash.
The statements of financial position of the two companies immediately after the acquisition transaction appear below.
P Company | S Company | |||||||
Carrying Amount | Carrying Amount | Fair Value | ||||||
Plant and equipment (net) | $ | 9,500 | $ | 7,200 | $ | 6,300 | ||
Investment in S Company | 8,100 | |||||||
Inventory | 6,560 | 5,300 | 5,600 | |||||
Accounts receivable | 5,950 | 3,200 | 3,200 | |||||
Cash | 4,300 | 2,450 | 2,450 | |||||
$ | 34,410 | $ | 18,150 | |||||
Ordinary shares | $ | 11,900 | $ | 4,400 | ||||
Retained earnings | 15,410 | 5,050 | ||||||
Long-term liabilities | 4,400 | 3,400 | 3,400 | |||||
Other current liabilities | 1,400 | 3,200 | 3,200 | |||||
Accounts payable | 1,300 | 2,100 | 2,100 | |||||
$ | 34,410 | $ | 18,150 | |||||
Required:
(a) Prepare a consolidated statement of financial position in order of liquidity i.e starting with cash at the date of acquisition under each of the following:
(i) Identifiable net assets method
(ii) Fair value enterprise method
(b) Calculate the current ratio and debt-to-equity ratio for P Company under the identifiable net assets (INA) method and the fair value enterprise (FVE) method. (Round "Current ratio" answers to 2 decimal places and "Debt to equity ratio" answers to 4 decimal places.)
INA | FVE | ||
Current ratio | |||
Debt to equity ratio | |||
We need at least 9 more requests to produce the answer.
1 / 10 have requested this problem solution
The more requests, the faster the answer.
On December 31, Year 1, P Company purchased 90% of the outstanding shares of S Company for $8,100 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. P Company S Company C
On December 31, Year 1, Company A purchased 75% of Company B’s outstanding common shares for $150,000 in cash. On that date, the carrying amount of Company B’s assets and liabilities approximated their fair value, and the fair value of the noncontrolling interest (NCI) was $12,000. The following is the summarized balance sheet information for the two companies on December 31, Year 1, before the acquisition. Company A Company B Current assets $200,000 $ 80,000 Noncurrent assets 320,000 140,000 Current...
Financial statements for Benson Company follow. BENSON COMPANY Balance Sheets As of December 31 2019 2018 Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories 17,500 13,500 20,300 44,00036,090 129,000 137,0e0 28,00890 6,300 Prepaid items Total current assets 26,966 13,000 238,800 205,800 27,00020,880 270,000 255,0ee 29,888 Investments Plant (net) Land 24,800 Total assets $564,800 $504,800 Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable 17,200 8,500 88,800 75,00 24,00010 18,000 130,000 101,580 Total current liabilities...
Financial statements for Benson Company follow. BENSON COMPANY Balance Sheets As of December 31 2019 2018 Assets Current assets Cash $ 17,500 $ 13,500 Marketable securities 20,300 6,300 Accounts receivable (net) 44,000 36,000 Inventories 129,000 137,000 Prepaid items 28,000 13,000 Total current assets 238,800 205,800 Investments 27,000 20,000 Plant (net) 270,000 255,000 Land 29,000 24,000 Total assets $564,800 $504,800 Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $ 17,200 $ 8,500 Accounts payable 88,800 75,000 Salaries payable 24,000 18,000...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
Marin Inc.’s CFO has just left the office of the company president after a meeting about the draft SFP at April 30, 2020, and income statement for the year then ended. (Both are reproduced below.) “Our liquidity position looks healthy,” the president had remarked. “Look at the current and acid-test ratios, and the amount of working capital we have. And between the goodwill write off and depreciation, we have almost $23 million of non-cash expenses. I don’t understand why you’ve been...