Bentley Corporation and Rolls Manufacturing are considering a merger. The possible states of the economy and each company’s value in that state are shown here: State Probability Bentley Rolls Boom .70 $ 330,000 $ 300,000 Recession .30 130,000 100,000 Bentley currently has a bond issue outstanding with a face value of $145,000. Rolls is an all-equity company.
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Bentley Corporation and Rolls Manufacturing are considering a merger. The possible states of the economy and each company’s value in that state are shown here: |
State | Probability | Bentley | Rolls |
---|---|---|---|
Boom | .70 | $ 330,000 | $ 300,000 |
Recession | .30 | 130,000 | 100,000 |
Bentley currently has a bond issue outstanding with a face value of $145,000. Rolls is an all-equity company. |
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- (a) What assets and liabilities of unconsolidated affiliates are omitted from Cummins's balance sheet as a result of the equity method of accounting for those investments? Assets $_____ Liabilities $_______Which is a correct statement below? A. Equity is the residual interest in the liabilities of the entity after deducting all of its assets.B. Subscriptions receivable shall preferably be reflected as a deduction from the related subscribed share capital.C. Share premium is also known as capital stock.D. A deficit is a credit balance in retained earnings.1. As a result of the merger, what is the goodwill2. What is the Retained Earnings after the merger?3. What is the net increase or (decrease) in the stockholders’ equity of SD Corp. after the merger?
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- “The market capitalisation of a brand as reflected by their share price on the stock exchange isoften far higher than the actual asset value of the company.” Question) Evaluate this statement in relation to the difficulties encountered in valuing acompany when trying to sell it.Choose the incorrect statement below: A. Retained earnings are the funds contributed by shareholders in excess of par or stated value.B. Equity is defined as the residual interest in the assets of an entity after deducting all of the liabilities.C. Conversion of preference shares into ordinary shares directly affects retained earnings.D. The statement of changes in equity is a formal statement that shows the movements in the elements or components of the shareholders' equity.1. What is an intercorporate share investments? a) Significance Influence b) Financial Assets vs Investment in Associates c) Loss of Significance Influence 2. What is are the accounting treatment for Investments in Associates? a) Cost Method b) FV Method c) Equity Method 3. What is the accounting treatment for Impairment Loss of Investments. 0OUT DUT N PEDARB FOR ONLINE PARTICIPATION.
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