Download Guided ACCT 559 Corporate Consolidation Project: Milestone 1, 2 and 3


Download Guided ACCT 559 Corporate Consolidation Project Milestone 1 2 and 3


1Sales will increase by 10% in 2017
2All sales will be on account
3Accounts receivable will be 5 percent lower on 12/31/17 than on 12/31/16
4The cost of goods sold will increase by 9% in 2017
5All purchases of merchandise will be on account
6Accounts payable are expected to be 50,500 in 12/31/2017
7Inventory will be 3% higher in 2017 than in 2016
8Straight-line depreciation is used for all fixed assets
9No fixed assets will be disposed of during 2017.  Annual depreciation on existing assets is 40,000 per year
10Equipment was purchased on 1/1/17 for $48,000 cash; 10-year life and no salvage
11Operating expenses other than depreciation will increase by 14% in 2017
12All operating expenses other than depreciation will be paid in cash
13The parent’s income tax rate is 40%; taxes are paid in 4 payments, the 15th of April, June, September & December
14The parent will continue the $2.50 per share annual cash dividend on its common stock
15If the tender offer is successful;, the Parent will finance the acquisition by issuing 170,000 of 6% non-convertible bonds at par on Jan 1 ,2017. Bonds pay interest on July 1 2017 and semiannually thereafter each January 1 and July 1 until maturity on January 1, 2027.
16The acquisition will be accounted for as a purchase and the Parent will account for the investment using the equity method.  Direct costs for the tender offer of $2,000 were paid in cash by parents in 2017.
17As of January 1, 2017, all of the subsidiary’s assets and liabilities are fairly valued except for machinery with a book value of $8,000, an estimated fair value of $9,500, and a 5-year remaining useful life. Straight-line depreciation is used to amortize any revaluation increment.
18No transactions between these companies occurred prior to 2017. Parent plans to buy 50,000 of merchandise from a subsidiary in 2017 and will have 3,600 in remaining inventory on Dec 31, 2017. The subsidiary is expected to buy 2,400 of merchandise from a parent in 2017 and to have 495 in inventory on Dec 31, 2017.  Parent and subsidiary price their products to yield a 65 percent and 80 percent markup on cost, respectively.
19The parent intends to use three financial yardsticks to determine the financial attractiveness of the combination. 1) Parent wishes to acquire only if 2017 consolidated earnings per share will be at least as high as the earnings per share Parent would report without combination.  2) Parent will consider the combination unattractive if it will cause the consolidated current ratio to fall below 2 to 1.  3) ROE must remain above 20 percent for the combined equity.
20If the financial yardsticks above and the nonfinancial aspects are appealing, then the tender offer will be made.  If the objectives are not met, the acquisition will either be restructured or abandoned.

Need Guide to Project?


Are you looking for online test preparation assistance? You can avoid all the worries associated with taking online examinations by using our take my online exam expertise. As you prepare for your online exam, our exam helper will provide you with the most exact solution. We encourage you to ask our online exam helper for advice in order to determine the best course of action for passing your take-a-look. Many university students in well-known international locations like the United States, Canada, Australia, and the United Kingdom have benefited from our group’s online exam assistance, and they have all received respectable grades as a result. What then are you prepared for? Seize this chance to shine on your examination. Talk to us right now!

Scott Belmont from NYC, USA
Hired a tutor to take programming class and final exam
40 minutes ago
Ebony Nicole from Bronx, USA
Hired a tutor to take history and algebra final exams
2 hours ago
Randy Wells from Texas, USA
Hired an expert to take chemistry proctored exam
1 hour ago
Kurt LeBlanc from Iowa, USA
Hired an expert to take statistics online exam
1 hour ago