Ginormous Oil entered into an agreement to purchase all of the outstanding shares of Slick Company for $60 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of liabilities on the balance sheet of Slick Co. was $1.46 billion. Immediately prior to the Ginormous Oil bid, the shares of Slick Co. traded at $33 per share. What value did Ginormous Oil place on the control of Slick Co.? a. $2.21 billion b. $2.71 billion c. $4.17 billion d. $6.38 billion
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- Zaata Ltd decided to repurchase 500,000 of its ordinary shares under a buy-back scheme for $5.70 per share. At the date of the buy-back, the equity of the company consisted of: Share capital (6,000,000 shares fully paid) General reserve Retained earnings $ 12,000,000 1,360,000 2,460,000 The costs of the buy-back scheme amounted to $7,600. Instructions: A.Prepare the journal entries to account for the buy-back, assuming: (i)that the original amount of the shares is eliminated from Share Capital, and then any remaining buy-back price adjusted equally against the General Reserve and Retained Earnings accounts. (ii)that the buy-back is not adjusted against share capital, but is adjusted firstly against the General Reserve account, then any remaining against the Retained Earnings account. B.Assume now that the buy-back price per share was equal to $2.40 and that the company had no General Reserve account, and retained earnings of only $1,040,000. Further, assume that the company…In July 2007, News Corporation entered into an agreement to purchase all of the outstanding shares of Dow Jones and Company for $67 per share. Immediately prior to the News Corporation bid, the shares of Dow Jones traded at $42 per share. The number of outstanding shares at the time of the announcement was 87 million. The book value of interest-bearing liabilities on the balance sheet of Dow Jones was $1.52 billion. Estimate the cost of this acquisition to the shareholders of News Corporation What value did News Corporation place on the control of Dow Jones and Company? Note: For all requirements, enter your answers in billions rounded to 2 decimal places.On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $20,500. 1. Prepare entries to record both the acquisition and the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to record both the acquisition and the sale of these shares. View transaction list Journal entry worksheet 1 2 > On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. Note: Enter debits before credits. Date General Journal Debit Credit May 20 Record entry Clear entry View general journal
- On May 20, Montero Company paid $240,000 to acquire 105 shares (5%) of ORD Corporation as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $25,500. 1. Prepare entries to record both the acquisition and the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to record both the acquisition and the sale of these shares. View transaction listMarigold Corporation purchased 630 common shares of Ditch Inc. for $12,900 on February 21. Marigold paid a 1% commission on the share purchase and, because the shares were not publicly traded, decided to account for them following the cost model. On June 30, Ditch declared and paid a cash dividend of $1.90 per share. (a) Prepare Marigold Corporation's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation Feb. 21 Debit CreditOn January 1, year 1, ABC Company purchased 80% of the stock of XYZ for P4,000,000 cash. Prior to the acquisition, XYZ had 100,000 shares of stock outstanding. On the date of acquisition, XYZ's stock had fair value of P52 per share. During the year, XYZ reported P280,000 in net income and paid dividends of P50,000. What is the balance in the noncontrolling interest account on ABC's balance sheet on December 31, year 1?
- On January 5, 2018 Johnson Co. announced their planned acquisition of Smith Co. The following is a summary of the consideration to be paid for the acquisition. Cash: $10 million Stock: 1 million shares of Johnson Co. common stock. At January 5 the market price of the stock was $20 per share, but as of the date the transaction closed, Johnson Co. stock was trading at $25 per share. Contingent Consideration: The selling shareholders of Smith Co. are entitled to receive $2 million upon receipt of FDA approval (by December 31, 2018) of a medical device Smith is developing that is under review by the FDA. FDA approval is the sole contingency which must be resolved for the contingent consideration to be paid, however if approval is not received by the deadline, no payment is due. As of the acquisition date, Johnson believes there is 80% likelihood the contingent consideration will be paid. 1. What is the amount of consideration used to record this business combination under IFRS? Under US…When it purchased Sutton, Inc. on January 1, 20X1, Pavin Corporation issued 500,000 shares of its $5 par voting common stock. On that date the fair value of those shares totaled $4,200,000. Related to the acquisition, Pavin had payments to the attorneys and accountants of $200,000, and stock issuance fees of $100,000. Immediately prior to the purchase, the equity sections of the two firms appeared as follows: Pavin Sutton Common stock $ 4,000,000 $ 700,000 Paid-in capital in excess of par 7,500,000 900,000 Retained earnings 5,500,000 500,000 Total $17,000,000 $2,100,000 Immediately after the purchase, the consolidated balance sheet should report retained earnings of: a. $6,000,000 b. $5,800,000 c. $5,500,000 d. $5,300,000On January 1, year 1, ABC Company purchased 80% of the stock of XYZ for P4,000,000 cash. Prior to the acquisition, XYZ had 100,000 shares of stock outstanding. On the date of acquisition, XYZ's stock had fair value of P52 per share. During the year, XYZ reported P280,000 in net income and paid dividends of P50,000. What is the balance in the noncontrolling interest account on ABC's balance sheet on December 31, year 1? In good accounting form pls. Ty!
- 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…Company A has agreed to buy Company B for $48.00/share in stock. Company A and Company B's stock prices on the day before announcement were $112.00 and $42.00 respectively. Company B has 20 million shares outstanding, 12 million exercisable options outstanding with an average exercise price of $28.00 per share, $120 million in net debt to be assumed by Company A and minority interests of $25 million to be acquired for cash. O 17.32 15.75 O 19.65 Company B Income Statement Items Calculate the equity to net income multiple. 20.00 LTM Revenue LTM EBITDA LTM Net Income $1000 million 95 million 60 millionOn January 1, 2021, X Inc. purchased 25% of the voting shares of Y Inc. However, due to a system crash, the initial amount of consideration paid for this 25% has been lost. X uses the equity method. X has significant influence over Y. Calculate the Value of the initial purchase X Inc. paid for its 25% ownership (i.e. January 1, 2021), given the following information that you were able to find: Value of the Investment account in Y Inc. at the end of 2023 was $97,000 Y's net income and declared dividends for the following three years are as follows: Net Income (loss) Dividends 2021 $50,000 $20,000 2022 $70,000 $80,000 2023 $30,000 $60,000