World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim and Axle Company. You are given the following facts: World Wheelrim Merged Firm and Axle Enterprises $2 $40 Earnings per share Price per share Price-earnings ratio Number of shares Total earnings |Total market value $2.50 $25 $2.67 20 10 100,000 $200,000 $4,000,000 200,000 500,000 $5,000,000 There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.67 earnings per share objective. Required: (a.) (Ь.) Complete the above table for the merged firm. Show all computations. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? (c.) (d.) What is the cost of the merger to World Enterprises? What is the change in the total market value of the World Enterprises shares that were outstanding before the merger?

World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim and Axle Company. You are given the following facts: World Wheelrim Merged Firm and Axle Enterprises $2 $40 Earnings per share Price per share Price-earnings ratio Number of shares Total earnings |Total market value $2.50 $25 $2.67 20 10 100,000 $200,000 $4,000,000 200,000 500,000 $5,000,000 There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.67 earnings per share objective. Required: (a.) (Ь.) Complete the above table for the merged firm. Show all computations. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? (c.) (d.) What is the cost of the merger to World Enterprises? What is the change in the total market value of the World Enterprises shares that were outstanding before the merger?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gain
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
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
Procta Ltd is determined to report earnings per share of R9.5. It therefore acquires JJ&J Company. You are given the following facts Proctas Ltd JJ&J Merged firm Earnings per share R6.50 R8 R9.50 Price per share R36 R21 ? Price-earnings ratio 18 7 ? Number of shares 50000 60000 ? Total earnings R325,000 R480,000 ? Total market value R5,850,000 R3,360,000 ? Once again there are no gains from merging. In exchange for JJ&J shares,Proctas Ltd issues just enough of its own shares to ensure its R2.67 earnings per share objective. a. Complete the above table for the merged firm. c. What is the cost of the cash offer if proctas ltd paid R2500000 for JJ&J?
The owners’ equity account for Rantuil Utilities Berhad are shown below: Common Share (RM2 par) - RM30,000Capital Surplus - RM285,000Retained earnings - RM648,100Total shareholder’s equity - RM963,100 If Rantuil Utilities Berhad currently sells for RM30 per share and a 10 percent share dividend is declared,i. Determine the number of new shares that will be distributed.ii. Reconstruct new owners’ equity account for Rantuil Utilities Berhad.
The net income of Zia company for the year ended December 31, 2018 amounted to P5,600,000. Determine the earnings per share of Zia in the following independent cases: a. The entity has only one class of share capital, 100,000 shares with par value of P100. The entity has two classes of share capital: Preference share, 10% cumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 b. The entity has two classes of share capital: Preference share, 10% noncumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 The preference dividend for the current year was declared. c. The entity has two classes of share capital: Preference share, 10% noncumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 The preference dividend for the current year was not declared.
Please answer in excel form if possible Consider Firm X and Y. The firm had total earnings of $500,000 and Shares outstanding of 2,250,000. Firm X per-share market value is 350.5 Firm X per-share book value is $88. Firm Y had total earnings of $1,450,000 and Shares outstanding of 222,500. Firm Y per-share market value is $698.5. Firm Y per-share book value is $126.5. Assume that Firm X acquires Firm Y by issuing long-term debt to purchase all the shares outstanding at a merger premium of $5.375. Assuming that neither firm has any debt before the merger, what would be the total assets for the new company XY. Assume that Firm Y acquires Firm X by issuing long-term debt to purchase all the shares outstanding at a merger premium of $7.875. Assuming that neither firm has any debt before the merger, what would be the total assets for the new company YX. NOTE: Write the number. Do not answer in millions or in thousands. If your answer is 23,254,267.6849 answer 23254267.6849
The following data are submitted relative to Pentagon Holdings Corp. and itssubsidiary, Slogan Generators Co., whose stocks it acquired on January 1, 2008. Pentagon SloganHoldings Co. Generators Co.Par value of stock outstanding P500,000 P 75,000Portion of stock owned by Pentagon 90%Retained Earnings, January 1, 2008 180,000 45,000Cost to Pentagon of stock acquired 110,000Net income from own operationsduring 2008 45,000 5,000Dividends paid during 2008 30,000 4,500The Pentagon Holdings Corp. has adopted the equity method of accounting for investment.Any excess is attributable to an asset with a 10 years life.1. In preparing a Consolidated Statement of Financial Position for Pentagon, thecarrying value of the investment in Slogan shares as of the end of 2008 isa. P103,500 c. P110,000b. P108,450 d. P110,250
The following data are submitted relative to Pentagon Holdings Corp. and itssubsidiary, Slogan Generators Co., whose stocks it acquired on January 1, 2008. Pentagon SloganHoldings Co. Generators Co.Par value of stock outstanding P500,000 P 75,000Portion of stock owned by Pentagon 90%Retained Earnings, January 1, 2008 180,000 45,000Cost to Pentagon of stock acquired 110,000Net income from own operationsduring 2008 45,000 5,000Dividends paid during 2008 30,000 4,500The Pentagon Holdings Corp. has adopted the equity method of accounting for investment.Any excess is attributable to an asset with a 10 years life. 1. On January 1, 2008, the book value of the Slogan shares acquired by Pentagon amountedtoa. P67,500 c. P108,000b. P99,000 d. P110,250
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World Enterprises is determined to report earnings per share of $2.17. It therefore acquires the Wheelrim and Axle Company. You are given the following facts: WorldEnterprises Wheelrimand Axle Merged Firm Earnings per share $ 1.80 $ 2.40 $2.17 Price per share $ 36.00 $ 24.00 ? Price–earnings ratio 20 10 ? Number of shares 90,000 140,000 ? Total earnings $ 162,000 $ 336,000 ? Total market value $ 3,240,000 $ 3,360,000 ? There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.17 earnings per share objective. Required: Complete the below table for the merged firm. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? What is the cost of the merger to World Enterprises? What is the change in the total market value of the World Enterprises shares that were…
On Jan 2, 20X1, ABC acquired 20% of the 400,000 ordinary shares of Yellow Co at P30 per share. The following data are applicable for 20X1 and 20X2: 20X1 20X2 Yellow dividends 40,000 48,000 Yellow profit 140,000 160,000 Yellow share market price at year end 32 31 How much is the carrying value of the Investment in associate-Yellow at Dec 31, 20X2?