EXERCISE 12METRO is going to merge with MEDEC, with METRO as the surviving firm. It is agreedthat the exchange ratio is 1:2Metro (RM*000)Medec(RM 000)AssetsCurrent assets5070Fixed assets650700180250Liabilities and EquitiesCurrent liabilitiesLong term debtCommon stock (RM1 par)Capital surplusRetained earnings30101406040080508030250700Earnings available to common stockholdersCommon Dividends10013010050Addition to Retained Earnings5030SITI RAHAYU BELI/FPP/UITM SABAHPage 25Prepare a post merger financial position for METRO using the pooling of interest method.

Under the pooling of interest method, all the assets, liabilities, and reserves of the transferor…

EXERCISE 12 METRO is going to merge with MEDEC, with METRO as the surviving firm. It is agreed that the exchange ratio is 1:2 Metro (RM Medec(RM '000) *000) Assets Current assets Fixed assets 50 70 650 700 180 250 Liabilities and Equities Current liabilities Long term debt Common stock (RMI par) Capital surplus Retained earnings 30 140 10 60 400 80 50 70 30 80 700 250 Earnings available to common stockholders Common Dividends 130 100 30 100 50 50 Addition to Retained Earnings SITI RAHAYU BELI/FPP/UITM SABAH Page 25 Prepare a post merger financial position for METRO using the pooling of interest method.

EXERCISE 12 METRO is going to merge with MEDEC, with METRO as the surviving firm. It is agreed that the exchange ratio is 1:2 Metro (RM Medec(RM '000) *000) Assets Current assets Fixed assets 50 70 650 700 180 250 Liabilities and Equities Current liabilities Long term debt Common stock (RMI par) Capital surplus Retained earnings 30 140 10 60 400 80 50 70 30 80 700 250 Earnings available to common stockholders Common Dividends 130 100 30 100 50 50 Addition to Retained Earnings SITI RAHAYU BELI/FPP/UITM SABAH Page 25 Prepare a post merger financial position for METRO using the pooling of interest method.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 99.2C

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