If P. company paid $360000 toacquire a part of S. companycommon stocks and if thepositive difference balancebetween the total implied valueand the total amount of S.company equities was $130000and the total amount of the bookvalue of S. company equities was:$350000, then answer (16-20)The percentage of controlling.16= interest in S. company

The purchase consideration is the amount paid by the acquiring company to the subsidiary company in…

Answered: If P. company paid $360000 to acquire a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute for: Enterprise Value and Equity Value
A Ltd is acquiring B Ltd and will pay consideration totally through shares. The financial data of both companies are given below : A LTD B LTD PROFITS 800000 300000 NO.OF EQUITY SHARES 400000 200000 EPS 2 1.5 P/E RATIO 12 7 Calculate the following: 1. Market price of each company share? 2. Market Capitalization of each company 3. Find out the Exchange Ratio(Swap Ratio)
Case 2: the Investment Held for Trading Securities account in the book of Tatay (acquired in 2020) represents 30% ownership interest in Walanay, Inc. Walanay subsequently reacquires 50% of its outstanding shares from other investors. The previously held equity of Tatay have a fair value of three times its book value now. Tatay elected to measure NCI at ‘proportionate share’.With the stated facts, answer the following:1.How much is the Consideration Transferred?a. P 1,350,000.00b. P 1,900,000.00c. P 1,750,000.00d. P 1,800,000.002.How much is the Non-Controlling Interest in the acquiree?a. P 0.00b. P 150,000.00c. P 684,000.00d. P 1,200,000.003.How much is the Fair Value of the previously held equity interest in the acquiree?a. P 0.00b. P 540,000.00c. P 450,000.00d. P 500,000.00
Based on the presumption in IAS 27, the cost method is applied for equity securities when the percentage of ownership of another company is: Select one: A. 20% to 50%. B. Exactly 100%. C. Less than 20%. D. Over 50%.
World Enterprises is determined to acquire Intous Ltd through exchanging stocks. World Enterprises is offering R65 per share for Intous ltd. You are given the following information World Enterprises Intous Ltd Net Income R50 R10 Shares outstanding 5000 2000 Earnings per share R10 R5 Market price per share R150 Price earnings ratio R15 a. Calculate the number of shares to be issued by Intous Ltd: b. Calculate combined earnings per share of both World Enterprise and Intous Ltd c. Calculate price earnings ratio (P/E ratio) paid (Hint: use the R65 to calculate the P/E ratio) d. Compare the current and paid P / E ratios
Required: (a)Assuming a rights issue of shares is made, calculate: (i)the theoretical ex-rights price of an ordinary share in Devonian plc (ii)the value of the rights for each original ordinary share. (b)Calculate the price of an ordinary share in Devonian plc in one year’s time assuming: (i)a rights issue is made (ii)a loan issue is made. Comment on your findings.
The entity received P4,500,000 cash from the issuance of its 9%, 10-year P5,000,000 par value preference shares. How much is the cost of the preference shares using the following methods? 1. Yield-to-maturity formula 2. Interpolation method using multiplies of 1%
The ABC Company will issue shares of P 20 par value common stock for all the assets and liabilities of XYZ Company. ABC Company’s common stock has a current price of P 40 per share. The fair market value of the current assets of XYZ is P 800,000, while that of the PPE is P 3,200,000. The liabilities are 600,000. To have a gain from acquisition of P200,000 the amount of shares to be issued by ABC Company should be : 75,000 74,000 85,000 80,000
4. An entity showed the following data:Share capital, par value P50 5,000,000Share premium 200,000Retained Earnings 2,000,000Market value of share on declaration date 75Market value of share on distribution date 85Treat each item independently: e. If the entity would declare a 2 for 1 share split, How much would be the new par value?
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…
The following data are taken from the books of a dealer in securities: How mu ch is the outputtax using 12% rate? Share held as inventory Share held as investment Selling price 3,000,000 2,000,000 Acquisition cost 1,000,000 1,500,000 Oth er Income 200,000
H1.

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