companies: GSK and Pfizer
Management Science Department
Yanbu Industrial College (Female Campus)
The Royal Commission at Yanbu
Kingdom of Saudi Arabia
Academic Year 2023-24
Semester 452- 232
PROJECT AND ASSIGNMENT
Course Name and Code:
ADVANCE ACCOUNTING
ACCT 412
Section:
1
Due Date:
Week 14
Submission Date:
Thursday
before 5 pm
Total Marks:
25
Marks Obtained:
Marked By:
Salma Baabbad
Signature:
Academic Integrity
Plagiarism
The practice of taking someone else’s work or ideas and passing them off as one’s own. An example of
plagiarism is to use creative works of another, without appropriate acknowledgment of the author or source.
Collusion
Secret or illegal cooperation in order to deceive others. Collusion is the presentation of an assignment as one’s
own which is in fact the result in whole or in part of unauthorized collaboration with other person(s).
Collusion involves the cooperation of two or more individuals in plagiarism or other forms of academic
misconduct.
Both plagiarism and collusion constitute cheating. Disciplinary action will be taken against students who engage in
plagiarism and collusion.
Student Declaration
I have read and understood the statement of academic integrity written above. I certify that the attached work is entirely
my own except where work quoted is duly acknowledged in the text; that I have not worked with another person or
persons except where specifically permitted by the teacher, and that this work has not been submitted for assessment by
myself or any other person in any other time. I have retained a copy of my work.
Student ID
Student Name
Signature
CLO
PLO
Question
1.1
Knowledge- Module 1
Part 1 Q1 to 10
5
2.1
Skills – Module 2
7
2.2
Skills – Module 4
Part 1 Q11
and Part 2 Q1
Part 2 Q2
3.2
Competence- Module 5
Part 2 Q3
6
TOTAL
Total marks
Marks
awarded
7
25
PART 1 (PROJECT)
INTRODUCTION
Mergers & Acquisition project is designed to get you familiar with real company business
combination transactions.
REQUIREMENT
1. Form into a group of 4 members.
2. Use the M&A list provided (at the end of the questions) to select the company. You will
need to choose the company and book the company. This booking will be on the first come
first serve basis.
3. For each company selected in step #1, go to the SEC’s EDGAR database to find the Form
S-4 ( final) for each business combination. Save each Form S-4 and download it. If you
cannot find the form in SEC’s EDGAR database, you may go to company’s website and
click on historical performance or news.
4. Teamwork, communication among members, and effective coordination are important to
the successful completion of the project.
5. All questions must be answered. If a question does not apply to your business
combination, you must state that the question does not apply and explain why.
6. Some of the questions relate to the performance of the business combination since the date
of the merger or acquisition. Each team is expected to use the acquiring company’s
Page 2 of 8
quarterly and annual reports (including 8-K and 10-K filings with the SEC), press releases,
and other sources to answer questions pertaining post-merger periods.
7. Each team member is expected to review the entire report and make suggestions for
improving the report. Use spell check and grammar check before turning in your reports
Questions
Business Combination Team Project
1. Name and briefly describe the primary products, and lines of business or segments?
Acquiring company:
Target Company:
2. What size are the companies in terms sales & assets before the acquisition?
Acquiring Company:
Target Company:
3. Where are they located, state of incorporation?
Acquiring Company:
Target Company:
4. What reasons are given for the merger/acquisition? Provide necessary references (news
article, company website etc)
5. What is the name for the new company after the acquisition?
6. Benefits and Risks:
(A) What benefits did the combined entity expect to achieve, and when?
(B) What are the risks and uncertainties associated with the business combination? List
each risk and describe how they companies intended to handle these risks.
7. Was severance payments (Golden Parachutes) paid to top executives of the target or
acquiring companies? Describe the types and amounts of payments to executives.
Page 3 of 8
8. Describe the acquisition process:
a) How the combination was structured (statutory merger, acquisition, or statutory
consolidation?). Explain your reason
b) How would you classify the business combination: horizontal combination, vertical
combination, or conglomerate combination? Explain
c) What was the purchase price per share?
9. From the information available, what are the financial reporting implications of the
merger/acquisition? Explain
a) Are pro forma financial statements presented?
b) What amount of goodwill is recorded?
10. Proposed purchased price and fees.
(A) What is the amount of direct acquisition cost? List the components of the direct
acquisition costs.
(A) What is the amount stock issuance costs or any other additional costs?
11. Given the purchase price prepare the journal entry the acquiring company would have
made to record the business combination.
LIST of COMPANIES:
1. Pfizer Inc and Hospira Inc.
2. Intel and Altera
3. Shell and BG Group
4. Charter and Time Warner Cable
5. Anthem Inc and Cigna Corporation
6. Energy Transfer Equity and Williams
7. Shire and Baxalta
8. LinkedIn and Microsoft
9. Tyco International and Johnson Control
10. St Jude medical and Abott Laboratories
11. Qualcomm and NXP Semiconductors
12. British American Tobacco and Reynolds America
13. Starwood and Marriott International
14. Amazon and Whole Foods
Page 4 of 8
15. Intel and Mobileye
16. United technologies and Rockwell Collins
17. Coach and Kate Spade
18. CVS and Aetna
19. Arby’s Roark and Buffalo Wild Wings
20. Meredith Corporation and Time Inc
21. Discovery and Scripps Network Interactives
22. Google and HTC Smartphones
23. Dell Inc. and EMC Corporation
24. Cisco and AppDynamics
25. GSK and Pfizer
26. Any other example of business combination between two companies in the United States of
America
Page 5 of 8
PART 2 (Assignments)
Question 1 (7 marks)
P Corporation paid $420,000 for 70% of S Corporation’s $10 par common stock on December 31,
2022, when S Corporation’s stockholders’ equity was made up of $300,000 of Common Stock,
$90,000 of Other Contributed Capital and $60,000 of Retained Earnings. S’s identifiable assets
and liabilities reflected their fair values on December 31, 2022, except for S’s inventory which was
undervalued by $60,000 and their land which was undervalued by $25,000. Balance sheets for P
and S immediately after the business combination are presented in the partially completed workpaper below.
P
ASSETS
Cash
Accounts
receivable-net
Inventories
Land
Plant assetsnet
Investment in
S Corp.
Difference
between implied
and book value
Goodwill
Total Assets
EQUITIES
Current
liabilities
Capital stock
Additional paidin
capital
Retained
earnings
Noncontrolling
interest
Total Equities
S
$40,000
$30,000
30,000
185,000
45,000
45,000
165,000
120,000
480,000
240,000
Eliminations
Debit
Credit
Noncontrolling
Interest
Consolidated
Balances
420,000
$1,200,000
$600,000
$170,000
600,000
$150,000
300,000
150,000
90,000
280,000
60,000
$1,200,000
$600,000
Required: Complete the consolidated balance sheet workpaper for P Corporation and Subsidiary.
Page 6 of 8
Question 2 (7 marks)
On January 1, 2022, Roswell Systems, a U.S.-based company, purchased a controlling interest in
Bern Management Consultants located in Bern, Switzerland. The acquisition was treated as a
purchase transaction. The 2014 financial statements stated in Swiss francs are given below.
BERN MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2022
Jan. 1
Dec. 31
Cash and Receivables
Net Property, Plant, and Equipment
Totals
30,000
60,000
90,000
84,000
56,000
140,000
Accounts and Notes Payable
Common Stock
Retained Earnings
Totals
45,000
30,000
15,000
90,000
50,000
30,000
60,000
140,000
BERN MANAGEMENT CONSULTANTS
Consolidated Income and Retained Earnings
Statement
For the Year Ended December 31, 2022
Revenues
Operating Expenses including depreciation of 5,000 francs
Net income
Dividends Declared and Paid
Increase in Retained Earnings
112,000
45,000
67,000
22,000
45,000
Direct exchange rates for Swiss franc are:
U.S. Dollars per Franc
January 1, 2022
$0.9987
December 31, 2022
0.9321
Average for 2022
0.9654
Dividend declaration and payment date
0.9810
Required:
Translate the year-end balance sheet and income statement of the foreign subsidiary using the
current rate method of translation.
Page 7 of 8
Question 3 ( 6 marks)
Carter and Gore are partners in an automobile repair business. Their respective capital balances
are $425,000 and $275,000, and they share profits in a 3:2 ratio. Because of growth in their repair
business, they decide to admit a new partner. Bush is admitted to the partnership, after which
Carter, Gore, and Bush agree to share profits in a 3:2:1 ratio.
Required:
Prepare the necessary journal entries to record the admission of Bush in each of the following
independent situations:
A. Bush invests $300,000 for a one-fourth capital interest, but will not accept a capital balance
of less than his investment.
B. Bush invests $150,000 for a one-fifth capital interest. The partners agree that assets and
the firm as a whole should be revalued.
C. Bush purchases a 20% capital interest from each partner. Carter receives $100,000 and
Gore receives $50,000 directly from Bush.
Page 8 of 8
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
