Chapter 4
When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair value of $100,000
2. What amount should have been reported for the land on a consolidated balance sheet, according to SFAS141(R), assuming the economic unit concept was used?
A.$70,000
B.$75,000
C.$85,000
D.$92,500
E.$100,000
3. What amount of excess land allocation would be included for the calculation of non-controlling interest,according to SFAS 141(R)?
A.$0
B.$7,500
C.$17,500
D.$25,000
E.$70,000
4. What amount should have been reported for the land on a consolidated balance sheet, assuming theinvestment was obtained prior to SFAS 141(R) and the parent company concept was used?
A.$70,000
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A.$70,000
B.$56,000
C.$64,400
D.$42,000
E.$58,100 38. Keefe, Inc., a calendar-year corporation, acquires 70% of George Company on September 1, 2009 and anadditional 10% on April 1, 2010.
Total annual amortization of $6,000 relates to the first acquisition. Georgereports the following figures for 2010:
|Revenues |$500,000 |
|Expenses |400,000 |
|Retained earnings,1/1/10 |300,000 |
|Dividend paid |50,000 |
|Common Stock |200,000 |
Without regard for this investment, Keefe earns $300,000 in net income during 2010.All net income is earned evenly throughout the year.What is the controlling interest in consolidated net income for 2010?
A. $373,300
B. $372,850
C. $371,500
D. $376,000
E. $372,805
87. At what amount would consolidated goodwill be reported for 2009?
A.$150,000
B.$200,000
C.$50,000
D.$0
E.$135,000
Chapter 5
3. On January 1, 2009, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at year-end. Gallow 's reported net income was $204,000 and Race 's net income was $806,000. Race decided to use the equity method to account for this investment. What was the non-controlling
b.What are the amounts and timing of the acquisition investment’s free cash flow from 2013 through 2022?
3. Was the firm able to generate enough cash from operations to pay for all of its capital expenditures?
13. Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Eddy Auto Supplies Balance Sheet December 31, 2014 Cash $84,000 Accounts payable $110,000 Accounts receivable $80,000 Salaries and wages payable $20,000 Inventory $140,000 Mortgage payable $180,000 Prepaid insurance $60,000 Total liabilities $310,000 Stock investments $170,000 Land $190,000 Buildings $226,000 Common stock $240,000 Less: Accumulated Retained earnings $500,000 depreciation ($40,000) $186,000 Total
c. How could the transaction be structured a different way to get a better result for
ii. What percentage of the total (gross) assets acquired in the NDS acquisition (excluding liabilities assumed) are comprised of goodwill and other intangibles?
Shakespeare’s management uses $10 m from the modified line of credit to acquire Hamlet, a competitor publishing company. Management’s best estimate of the allocation of the $10 million purchase is as follows: $2 million of current assets and $8 million noncurrent assets (comprising $5 million of identifiable noncurrent assets, $2 million of intangible assets, and $1 million of goodwill). Hamlet’s prior-year
Market value per share = Book value per share = $12,000 / 750 shares = $16 per share
4.) What would the capital allocation plan look like if an additional $100,000 is made available?
9. Assuming that Santa Corporation was required to capitalize its operating lease how would the company’s
. (TCO 2) Barry owns a 30% interest in a partnership that earned $300,000 this year. He also owns 30% of the stock in a C corporation that earned $300,000 during the year. The partnership did not make any distributions, and the corporation did not pay any dividends. How much income must Barry report from these businesses? (Points : 2)
a. What risk-free rate and risk premium did you use in calculating the cost of equity for each division? Why did you choose these numbers?
According to the company's accounting system, what is the net operating income earned by product C11B?
Market value proportions of: Debt = $1,147,200 / $4,897,200 = 23.4% Pref. Share = $1,250,000 / $4,897,200 = 25.5% Common equity = $2,500,000 / $4,897,200 = 51.1%
To arrive to the correct set of cash flows to use for the most basic valuation method (the WACC), Kennecott should take net income and add back tax adjusted interest expenses, depreciation and goodwill amortization, and subtract increases in net working capital and capital expenditures. Without adjusting the net income to obtain the free cash flows, the value of Carborundum to Kennecott could justified $70-$85 per share. Multiplying the per share price of $85 by the 8 million shares outstanding, Carborundum would be worth $680 million. This figures is identical to the cash flows calculated under Exhibit 7 of the case, discounted at a discount rate of 10%, which comes out to $679 million.
• Q: What is the impact of the sale of the stadium transaction on Ciclón’s 2003 Income Statement and Statement of Cash Flows (under the Indirect Method), and on its Balance Sheet for the year ended on December 31th, 2003? Items to be addressed cash payment of $ 100 million cost of building the new stadium was $ 20 million market value of the land was $ 12 million the book value of the old stadium was $ 1 million useful live of the stadium was 40 years demolition cost at end useful live estimated $ 5 million (I take it as estimated $ 5 mio in 2043).