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QUESTION
Assume ABC Co. purchases TLC Co. for $2.5 billion. TLC has the following assets on its statement of Financial Position at the time of purchases:
- Assume ABC Co. purchases TLC Co. for $2.5 billion. TLC has the following assets on its statement of Financial Position at the time of purchases: Investments $400 million, Fixed Assets $500 and Land $100. What is the value of the Goodwill that ABC will show on its Statement of Financial Position after the acquisition?
- A company has the following transaction over its 4-year history:
Year 1 Incorporates, issues stock for $400 million, earns $25 million
Year 2 Earns $35 million, pays $5 million dividend
Year 3 Repurchase $50 million of stock, has net loss of $15 million pays $5 million dividend
year 4 Issues stock for $575 million, earns income of $55 million pays $10 million dividend
Calculate the Share Capital and Retained Earnings balances at the end of each year.
