1. [Purchase versus pooling; CFA adapted] Martin Manufac- turing, Inc., and Green Precision Machinery are two small metal casting and milling companies serving the aerospace and defense industry. On June 30, 2001, Martin acquired Green at a price per share equal to two times Green's book value per share Martin can structure the acquisition to either: Pay cash, in which case Martin will sell new Martin shares to obtain the cash required and use the purchase method to account for the acquisition, or Issue new Martin shares for shares of Green and use the pooling-of-interests method of accounting. Martin uses International Accounting Standards to prepare its fi- nancial statements Sales data for Martin and Green and additional financial data on Green are provided in Exhibit 14P-1.