prior to a potential merger veggie co has $6,150 in total earnings with $1,800 shares outstanding at a market price per share of $41. Fruits ince has $3300 in total earnings with 1235 shares outstanding at $26 per share. assume veggie co acquires fruits inc via an exchange of stock at a price of $28 for each share of fruits inc stock. both veggie co and fruits inc have no debt outstanding. what will veggie co earning per share be after the merger? A. 3.58 B. 3.32 C. 2.67 D. 3.04 E. 3.95
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- Prior to the merger, Glassons has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Country Road has $740 in total earnings with 220 shares outstanding at $18 per share. Assume Glassons acquires Country Road via an exchange of stock at a price of $20 for each share of Country Road's stock. Both Glassons and Country Road have no debt outstanding. What will the earnings per share of Glassons be after the merger?Wagas Corporation and Tapat Company merged as of January 1, 2014. To effect the merger, Wagas paid finder's fees of P40,000, legal fees of P13,000, audit fees related to the stock issuance of P10,000, stock registration fees of P5,000, and stock listing application fees of P4,000. Based on the preceding information: P72,000 of stock issue costs are treated as goodwill. P19,000 of stock issue costs are treated as a reduction in share premium. P19,000 of stock issue costs are expensed. P72,000 of stock issue costs are expensed.Man merged with San Corporation in a business combination in which San issued 30,000 shares of its $5 par (current fair value $20 a share) common stock to stockholders of Man in exchange for all their outstanding common stock. The journal entry for the merger includes: a. Credit to common stock $ 450,000. b. Credit to common stock $ 300,000. c. Credit to common stock $ 150,000. d. Credit to common stock $ 600,000.
- On 12/31, Choco acquired all assets and liabilities of Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share and this combination is a statutory merger (Cake was dissolved). Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding Choco Book Values Cake Book Values Cake Fair Values Cash and Receivable 350,000 180,000 170,000 Inventories 250,000 100,000 150,000 Land 700,000 120,000 240,000 Building and equipment 600,000 600,000 900,000 Patented technology 100,000 0 60,000 Accounts payable 300,000 120,000 150,000 Long-term debt 0 400,000 350,000 Common stock 750,000 300,000 Additional paid in capital 500,000 60,000 Retained earnings 12/31 450,000 120,000 Revenues 350,000 160,000 Expenses 310,000 130,000 Q1. How much is the consideration transferred? Q2. What is the consolidated balance for Land? Q3. What is the consolidated balance for Accounts…Man merged with San Corporation in a business combination in which San issued 30,000 shares of its $5 par (current fair value $20 a share) common stock to stockholders of Man in exchange for all their outstanding common stock. The journal entry for the merger includes: a. Debit to investment in common stock of Man company $ 600,000. b. Debit to investment in common stock of Man company $ 450,000. c. Debit to investment in common stock of Man company $ 150,000. d. Debit to investment in common stock of Man company $ 300,000.On January 1, NewTune Company exchanges 19,633 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each of NewTune’s shares has a $4 par value and a $50 fair value. The fair value of the stock exchanged in the acquisition was considered equal to On-the-Go’s fair value. NewTune also paid $45,550 in stock registration and issuance costs in connection with the merger. Several of On-the-Go’s accounts’ fair values differ from their book values on this date (credit balances in parentheses): Book Values Fair Values Receivables $ 62,500 $ 60,400 Trademarks 105,500 294,500 Record music catalog 75,750 270,000 In-process research and development 0 243,000 Notes payable (67,000 ) (61,700 ) Precombination book values for the two companies are as follows: NewTune On-the-Go Cash $ 76,000 $ 52,750 Receivables 162,000 62,500 Trademarks 485,000 105,500 Record music catalog 875,000…
- Pete Corporation and Sol Company agreed to combine their businesses, with Pete Corporation as the surviving entity. Pete will issue 48,000 shares of its capital stock, with a par value of P100 per share, and a fair market value of P175 per share. Pete incurred the following additional acquisition cost:Professional Fees P120,000Indirect acquisition costs 80,000Cost to Register and issue stock 50,000Before combination, their respective balance sheets showed stock holders equity account as follow: Pete SolCapital stock P7,200,000 P3,600,000Additional paid in capital 3,120,000 360,000Retained earnings 6,000,000 2,040,000Determine the amount of consolidated shareholders' equity immediately after business combination.On January 1, NewTune Company exchanges 15,000 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each of NewTune’s shares has a $4 par value and a $50 fair value. The fair value of the stock exchanged in the acquisition was considered equal to On-the-Go’s fair value. NewTune also paid $25,000 in stock registration and issuance costs in connection with the merger. Several of On-the-Go’s accounts’ fair values differ from their book values on this date (credit balances in parentheses): Book Values Fair Values Receivables $ 65,000 $ 63,000 Trademarks 95,000 225,000 Record music catalog 60,000 180,000 In-process research and development –0– 200,000 Notes payable (50,000) (45,000) Precombination book values for the two companies are as follows: NewTune On-the-Go Cash $ 60,000 $ 29,000 Receivables 150,000 65,000 Trademarks 400,000 95,000 Record music catalog…Data for Henry Company and Mayer Services are given in the following table : Item Henry Company Mayer Services Earnings available for common stock $195,000 $45,000 Number of shares of common stock outstanding 75,000 25,000 Market price per share $31 $23 Henry Company is considering merging with Mayer by swapping 1.25 shares of its stock for each share of Mayer stock. Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging. d. Calculate the post-merger earnings per share (EPS) for Henry Company. e. Calculate the expected market price per share of the merged firm.
- Patel Company issued 107,600 shares of $1 par value common stock (market value of $6/share) for the net assets of Seely Company on January 1, 2014, in a statutory merger. Seely Company had the following assets, liabilities, and owners’ equity at that time: Book Value Tax Basis Fair Value Difference Cash $18,080 $18,080 $—0— Accounts receivable 107,430 107,430 —0— Inventory (LIFO) 84,850 134,420 49,570 Land 28,650 53,340 24,690 Plant assets (net) 410,660 476,330 65,670 Total assets $649,670 $789,600 Allowance for uncollectible accounts $9,540 $9,540 $—0— Accounts payable 54,020 54,020 —0— Bonds payable 180,300 160,970 (19,330) Common stock, $1 par value 87,340 Other contributed capital 141,000 Retained earnings 177,470 Total equities $649,670 Prepare the journal entry to record the assets acquired and liabilities assumed. Assume an…CBA Corp. is worth $15 million as a stand-alone firm. ABC Corp. has offered 350,000 shares valued at $50 each to acquire CBA. After the announcement, however, the price of ABC's shares falls to $45. What was the cost of the merger?The following book and fair values were available for Westmont Company as of March 1.Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo pays $42,000 for legal fees to complete the transaction. Prepare Arturo’s journal entries to record its acquisition of Westmont.