Based on the information provided in Note 4 (Acquisitions) and Note 16 (Shareholders' Equity) in Fiserv, Inc. Form 10-Q for fiscal quarter ended September 30, 2019, prepare all required entry(s) on the books of Fiserv, Inc. on July 29, 2019 to record the acquisition of First Data assuming that First Data was dissolved.

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w Merger Assignment_Fall 2022 [Compatibility Mode] Q v Search in Document Home Insert Design Layout References Mailings Review View Table Design Layout Share AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdE AaBbCcDdE AaBbCcDdEe AaBbCcDdl Paste BI U abe X2 X2 A A. Emphasis Heading 1 Heading 2 Heading 4 Heading 7 Norma Strong Styles Sensitivity Pane x View Only Your account thd21@scarletmail.rutgers.edu doesn't allow editing on a Mac. To learn more, contact your admin about your Office plan. Use Another Account The Merger Agreement On July 29, 2019, Fiserv, Inc. acquired 100% of the common stock of First Data in a business combination accounted for under the acquisition method outlined in ASC Topic 805. The accounting treatment of this merger is discussed in Note 4 to the financial statements in SEC Form 10-Q of Fiserv, Inc. for fiscal quarter ended September 30, 2019, including the consideration transferred by Fiserv, Inc. and the assets and liabilities of First Data acquired and assumed, respectively. Required: Based on the information provided in Note 4 (Acquisitions) and Note 16 (Shareholders' Equity) in Fiserv, Inc. Form 10-Q for fiscal quarter ended September 30, 2019, prepare all required entry(s) on the books of Fiserv, Inc. on July 29, 2019 to record the acquisition of First Data assuming that First Data was dissolved. Source Document: The Form 10-Q needed for this assignment can be found under Quarterly Results & Annual Reports of the Investor Relations page of Fiserv, Inc. website at: https://investors.fiserv.com/. Solution Account Debit Credit Page 1 of 2 224 words X English (United States) ? Accessibility: Unavailable + 100%Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 5 / 21 100% + 3. The assignment 3.1. ExxonMobil's acquisition of XTO Energy, Inc. On June 25, 2010, Exxon Mobil acquired 100% of the common stock of XTO Energy Inc. in a business combination accounted for under the acquisition method, as outlined in ASC 805. Details of this mer- ger are discussed in footnote 19 of Exxon Mobil's 2010 annual report, including the consideration transferred by Exxon Mobil and the assets and liabilities of XTO Energy acquired and assumed, respectively. Source documents needed for this assignment can be accessed from the SEC EDGAR website at www.sec.gov. These documents include: . Form S-4 filed by Exxon Mobil with the SEC on February 1, 2010. . Form 10-K of Exxon Mobil for fiscal year ended December 31, 2010. Exhibit 1 to this assignment includes excerpts from footnote 19 to Exxon Mobil's 2010 Form 10-K. These excerpts include the consideration transferred to former XTO shareholders, the fair value of the net assets of XTO acquired, and merger-related transaction costs. Exhibit 2 includes the Consolidated Statement of Changes in Equity from Exxon Mobil's 2010 Annual Report, which details the changes in Exxon Mobil's stockholders' equity for year ended 2010. Required: (1) The Securities Act of 1933 requires an acquiring firm to file Form S-4 for the registration of secu- rities issued in connection with a merger or consolidation in which securities of the corporation are exchanged for securities in another corporation. According to Item 4 of Part I of Form S-4, companies must provide "The reasons of the registrant and of the company being acquired for engaging in the transaction." Using the SEC's Edgar database, locate Form S-4 filed by Exxon Mobil in connection with its acquisition of XTO Energy. Discuss some of the economic reasons cited by the management of Exxon Mobil and XTO Energy for entering into this business com- bination. Note to Students: The reasons cited in Form S-4 are quite lengthy. You should provide a concise, orga- nized, analysis of these reasons consisting of approximately 250 words. Evidence of merely "copying and pasting" will result in downgrading of the score on this part of the assignment. 8 On the date of the business combination (December 3, 2010), the legal acquirer, RRI Energy, Inc., changed its name to GenOn Energy, Inc.,I Acc. for Merg. & Rev. Merg._J X 6 Ace. for Merg. & Rev. Merg._. X m Sign In | Connect | McGraw Hill X G The Merger Agreement On Ju X l u Homework Help - Q&A from O X l + v C' (D File l [Users/trucdo/Downloads/Ace.%20for%20Merg.%20&%20Rev.%20Merg._J.%200f%20Acc.%20Ed._2011.pdf Acc. for Merg. & Rev. Merg._J. of Ace. Ed._2011.pdf 126 M. SchoderbEk/j. (If/inc. Ed. 29 {2011) 122141 Note 19: Acquisition of XTO Energy Inc. Description of the Transaction. On June 25, 2010, ExxonMobil acquired XTO Energy Inc. (XTO) by merging a wholly-owned subsidiary of ExxonMobil with and into XTO (the "merger"), with XTO continuing as the surviving corporation and whollyowned subsidiary of ExxonMobili XTO is involved in the exploration for, production of, and transportation and sale of cmde oil and natural gas. X'I'O's asset base, technical capabilities and operating expertise, together with ExxonMobil's extensive research and development expertise, project management and operational skills, global scale and nancial capacity, should enable effective development of additional supplies of unconventional oil and gas resources. At the effective time of the merger, each share of XTO conunon stock was converted into the right to receive 0.7098 shares of common stock of ExxonMobil (the \"Exchange Ratio"), with cash being paid in lieu of any fractional shares of ExxonMobil stocki Also at the effective time, each outstanding option to purchase XTO common stock was converted into an option to purchase a number of shares of ExxonMobil stock based on the Exchange Ratio, and each outstanding restricted stock award and performance stock award of XTO was converted into a restricted stock award or performance stock award, as applicable, of ExxonMobil stock based on the Exchange Ratioi The components of the consideration transferred follow: (million: ofdollarr) Consideration attributable to stock issued "W 24,480 Consideration attributable to converted stock options '2' 179 Total consideration transferred 3 24,659 (1) The fair Value of the Corporation's common stock on the acquisition date was $59.10 per share based on the closing Value on the NYSE. The Corporation issued 416 million shares of stock previously held in treasury. The treasluy stock issued, based on the average cost, was valued at $21,139 million. The excess of the fair value of the consideration transferred over the cost of treasury stock issued was $3,520 million and was included in common stock without par value. (2) The portion of the fair value of XTO converted stockbased awards attribumble to premerger employee service was part of consideration. The remaining fair value of the awards will be recognized in future periods over the requisite service period. Recording of Assets Acquired and Liabilities Assumed. The transaction was accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date, The following table summarizes the assets acquired and liabilities assumed: Exhibit 1. Exxon Mobil Corporation. Excerpts from Note 19 to 2010 annual report. Source: Form 107K and annual report of Boron Mobil for scal year ended December 31. 2010. oaoaus Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill x G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 7 / 21 100% + Exhibit 1. Exxon Mobil Corporation. Excerpts from Note 19 to 2010 annual report. Source: Form 10-K and annual report of Exxon Mobil for fiscal year ended December 31, 2010. (2) Based on the information provided in footnote 19 and the Consolidated Statement of Changes in Equity in Exxon Mobil's 2010 Annual Report, prepare the entry on the books of Exxon Mobil on June 25, 2010 to record the acquisition of XTO Energy, assuming that XTO was dissolved (note: do not forget to record transaction costs). 3.2. Mirant Corporation's reverse merger with RRI Energy In Form S-4 filed with the SEC (May 28, 2010), RRI Energy, Inc. disclosed it had entered a merger agreement with Mirant Corporation. The merger would be accounted for as a reverse acquisition of RRI Energy by Mirant Corporation, with Mirant Corporation the designated accounting acquirer (see Accounting Treatment, p. 58). Under reverse-acquisition accounting, the net assets of RRI Energy Author's personal copy M. Schoderbek/J. of Acc. Ed. 29 (2011) 122-141 127 (millions of dollars) Cash and cash equivalents $ 47 Notes and accounts receivable 925 Inventories 170 Other current assets 911 Investments, advances and long-term receivables 52 Property, plant and equipment 47,300 Identifiable intangible assets 493 Goodwill 39 Other assets 75 Total assets acquired EA 50,012 Notes and loans payable 1,026 Accounts payable and accrued liabilities 1,788 Income taxes payable (199) rm debt 10.574Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 7 / 21 1 100% + (millions of dollars) Cash and cash equivalents $ 47 Notes and accounts receivable 925 Inventories 170 Other current assets 11 Investments, advances and long-term receivables 52 Property, plant and equipment 47,300 Identifiable intangible assets 493 Goodwill 39 Other assets 75 Total assets acquired EA 50,012 Notes and loans payable 1,026 Accounts payable and accrued liabilities 1,788 Income taxes payable (199) Long-term debt 10,574 Postretirement benefits reserves 65 Deferred income tax liabilities 11,204 Other long-term obligations 895 Total liabilities assumed 25,353 Net assets acquired 24,659 XTO Results and Pro Forma Impact of Merger. The following table presents revenues and earnings for XTO for the periods presented: Acquisition Date Through December 31, 2010 (millions of dollars) Revenues $ 4,448 Upstream earnings $ 262 Transaction-related costs were expensed as incurred. The Corporation recognized $18 million in transaction costs related to the merger in 2010. Exhibit 1 (continued) would be merged into Mirant Corporation, even though RRI Energy (later re-named GenOn Energy) was the legal acquirer and the surviving firm. On December 3, 2010, a press release was issued announcing that the merger between Mirant Cor-Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 8 / 21 100% + would be merged into Mirant Corporation, even though RRI Energy (later re-named GenOn Energy) was the legal acquirer and the surviving firm On December 3, 2010, a press release was issued announcing that the merger between Mirant Cor- poration and RRI Energy had been completed, and that RRI Energy, Inc. had changed its name to Gen- On Energy, Inc. Details of the reverse merger are provided in the MD&A section and in notes 2 and 3 of GenOn Energy's 2010 10-K report, including the consideration transferred and the assets acquired and liabilities assumed. Additional information concerning the legal capital and equity of the combined entity are in the Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss) of this 10-K report. Source documents needed for this assignment can be accessed from the SEC EDGAR website at www.sec.gov. These documents include: . Form S-4 filed by RRI Energy, Inc. with the SEC on September 13, 2010. Author's personal copy 128 M. Schoderbek/J. of Acc. Ed. 29 (2011) 122-141 ExxonMobil Share of Equity Accumulated Other Common ExxonMobil Non- Common Earnings Comprehensive Stock Held Share of controlling Total Stock Reinvested Income In Treasury Equity Interests Equity Balance at December 31, 2009 $ 5,503 $ 276,937 (5,461) $ (166,410) $ 110,569 $ 4,823 $ 115,392 Amortization of stock-based awards 751 751 751 Tax benefits related to stock- based awards 280 280 280 Other (683) (683) 10 (673 Net income for the year 30,460 30,460 938 31,398 Dividends - common shares (8,498) (8,498) 281) (8,779) Foreign exchange translation adjustment 584 584 450 1,034 Adjustment for foreign exchange translation loss included in net income 25 25 25 Postretirement benefits reserves adjustment (1,014) (1,014) (147) (1,161) Amortization of postretirementAcc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 8 / 21 100% + ExxonMobil Share of Equity Accumulated Other Common ExxonMobil Non- Common Earnings Comprehensive Stock Held Share o controlling Total Stock Reinvested Income In Treasury Equity Interests Equity Balance at December 31, 2009 $ 5,503 $ 276,937 $ (5,461) $ (166,410) $ 110,569 $ 4,823 $ 115,392 Amortization of stock-based awards 751 75 751 Tax benefits related to stock- based awards 280 280 280 Other (683) (683) 10 (673 Net income for the year 30,460 30,460 938 31,398 Dividends - common shares 8,498) 8,498) (281) (8,779) Foreign exchange translation adjustment 584 584 450 1,034 Adjustment for foreign exchange translation loss included in net income 25 25 25 Postretirement benefits reserves adjustment (1,014) (1,014) (147) (1,161) Amortization of postretirement benefits reserves adjustment included in net periodic benefit costs 988 988 52 1,040 Change in fair value of cash flow hedges 184 184 184 Realized (gain)/loss from settled cash flow hedges included in net income (129) (129) (129) Acquisitions at cost (13,093) 13,093) (5) 13,098) Issued for XTO merger 3,520 1,13 24,659 24,659 Other dispositions 1,756 1,756 1,756 Balance at December 31, 2010 9,371 $ 298,899 $ (4,823) $ (156,608) $ 146,839 $ 5,840 $ 152,679 Exhibit 2. Exxon Mobil Corporation 2010 consolidated statement of changes in equity. Source: Form 10-K and annual report of Exxon Mobil for fiscal year ended December 31, 2010. Form 10-K of Mirant Corporation for fiscal year ended December 31, 2009. . Form 10-K of GenOn Energy, Inc. for fiscal year ended December 31, 2010. Exhibit 3 to this assignment includes excerpts from the MD&A section and footnotes 2 and 3 of GenOn Energy's 2010 10-K report. The historical balance sheet for Mirant Corporation for year ended December 31, 2009 is in Exhibit 4. The post-merger balance sheet of GenOn Energy, Inc. dated Decem- ber 31, 2010 is in Exhibit 5, followed by GenOn's Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss) in Exhibit 6. Required:Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 11 / 21 | 100% + At December 31 2009 2008 in millions ASSETS Current Assets: Cash and cash equivalents $ 1,953 $ 1.831 Funds on deposit 220 204 Receivables, net 412 761 Derivative contract assets 1,416 2,582 Inventories 241 238 Prepaid expenses 144 132 Total current assets 4,386 ,748 Property, Plant and Equipment, net 3,633 3,215 Noncurrent Assets: Intangible assets, net 171 196 Derivative contract assets 599 585 Deferred income taxes 376 565 Prepaid rent 304 258 Other 98 121 Total noncurrent assets 1,548 1,725 Total Assets $ 9,567 $ 10,688 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 75 $ 46 Accounts payable and accrued liabilities 757 894 Derivative contract liabilities ,150 2,268 Deferred income taxes 376 565 Other Total current liabilities 2,362 3,784 Noncurrent Liabilities: Long-term debt, net of current portion 2,556 2.630 Derivative contract liabilities 163 244 Pension and postretirement obligations 113 148 Other 58 120 Total noncurrent liabilities 2,890 3,142 Stockholders' Equity: Common stock, par value $.01 per share, authorized 1.5 billion shares, issued 311,230,486 shares and 310,666,240 shares at December 31, 2009 and 2008, respectively, and outstanding 144,946,815 shares and 144,629,446 shares at December 31, 2009 and 2008, respectively 3 Treasury stock, at cost, 166,283,671 shares and 166,036,794 shares at December 31, 2009 and 2008, respectively (5,334) (5,330) Additional paid-in capital 11,42 11,401 Accumulated deficit (1,728) (2,222) Accumulated other comprehensive loss (53) (90) Total stockholders' equity 4,315 3,762 Total Liabilities and Stockholders' Equity 9,567 $ 10,688 Exhibit 4. Mirant Corporation 2009 consolidated balance sheet. Source: Form 10-K and annual report of Mirant Corporation for fiscal year ended December 31, 2009.Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 12 / 21 100% + Exhibit 4. Mirant Corporation 2009 consolidated balance sheet. Source: Form 10-K and annual report of Mirant Corporation for fiscal year ended December 31, 2009. (2) It is not uncommon for merger agreements to result in disgruntled shareholders of the combin- ing firms. Examine the Form S-4 filed by RRI Energy on September 13, 2010, and provide evidence, if any, of dissatisfied shareholders. (3) Compare the 2009 balance sheet of Mirant Corporation in its 2009 annual report (10-K) to the comparative balance sheet figures of GenOn Energy for year 2009 included in its 2010 annual report (10-K). Identify the line-item differences between the two balance sheets. (4) According to ACS 805-40-45-1: Consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (accounting acquiree) but described in the notes as a continuation of the financial state- ments of the legal subsidiary (accounting acquirer), with one adjustment, which is to retroactively adjust Author's personal copy 132 M. Schoderbek/J. of Acc. Ed. 29 (2011) 122-141 At December 31 2010 2009 in millions ASSETS Current Assets: Cash and cash equivalents $ 2,402 $ 1.953 Funds on deposit 1834 181 Receivables, net 536 412 Derivative contract 1,420 1,416 Inventories 554 241 Prepaid expenses 155 144 Total current assets 6,901 4,347 Property, Plant and Equipment, net 6,298 3,033 Noncurrent Assets: Intangible assets, ne 144 171 Derivative contract assets 716 599 Deferred income taxes 362 376 Prepaid rent 348 304 Other 505 98 Total no ,075 1,548Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 12 / 21 100% + At December 31 2010 2009 in millions ASSETS Current Assets: Cash and cash equivalents $ 2,402 $ 1.953 Funds on deposit 1.834 181 Receivables, net 536 412 Derivative contract assets 1,420 1,416 Inventories 554 241 Prepaid expenses 155 144 Total current assets 6,901 4,347 Property, Plant and Equipment, net 6,298 3,633 Noncurrent Assets: Intangible assets, net 144 171 Derivative contract assets 716 599 rred income taxes 362 376 Prepaid rent 348 304 Other 505 98 Total noncurrent assets 2,075 1,548 Total Assets $ 15,274 $ 9,528 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ 2,058 $ 75 Accounts payable and accrued liabilities 902 718 Derivative contract liabilities 1,227 1,150 Deferred income taxes 362 376 Other 133 Total current liabilities 4,682 2,323 Noncurrent Liabilities: Long-term debt, net of current portion 4,023 2,55 Derivative contract liabilities 189 163 Pension and postretirement obligations 171 113 Other 579 58 Total noncurrent liabilities 4,962 2,890 Stockholders' Equity: Common stock, par value $.001 per share, authorized 2.0 billion shares, ssued 770,857,530 shares and 410,924,221 shares at December 31, 2010 and 2009, respectively Additional paid-in capital 7,432 6,09 Accumulated deficit (1,778) (1,728) Accumulated other comprehensive loss (25) (53) Total stockholders' equity 5,630 4,315 Total Liabilities and Stockholders' Equity $ 15,274 $ 9,528 Exhibit 5. GenOn Energy, Inc. 2010 consolidated balance sheet. Source: Form 10-K and annual report of GenOn Energy, Inc. for iscal year ended December 31, 2010.Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 13 / 21 100% + What entry (s) are required to convert the 2009 balance sheet of Mirant Corporation to that of the December 31, 2009 figures of GenOn Energy reported in its 2010 annual report? (5) From Mirant Corporation's 2009 10-K report, how many shares of Mirant were outstanding on December 31, 2009? Using the exchange ratio of common stock, reconcile this figure to the number of shares outstanding of GenOn Energy on December 31, 2009. Author's personal copy M. Schoderbek /J. of Acc. Ed. 29 (2011) 122-141 133 Accumulated Additional Other Total Common Paid-in Accumulated Comprehensive Stockholders' Stock Capital Deficit Income (Loss) Equity Balance, December 31, 2009 $ $ $ (1,728) $ (53) $ 4,315 Share repurchases (11) (11) Stock-based compensation expense 42 42 Exercise of stock options Shares issued pursuant to the Merger of Mirant and RRI Energy 1,304 1,305 Total stockholders' equity before other comprehensive income 5,652 Net loss (50) (50) Pension and other postretirement benefits, net of tax of $0 6 6 Change in fair value of qualifying derivatives, net of settlements, net of tax of $ 21 21 Change in fair value of available-for-sale securities, net of tax of $0 Total other comprehensive loss (22) Balance, December 31, 2010 $ 1 $ 7,432 $ (1,778) $ (25) $ 5,630Acc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 13 / 21 100% + 4. Solutions and teaching notes 4.1. ExxonMobil's acquisition of XTO Energy, Inc. 4.1.1. Solution (1) The reasons for the merger provided below for both Exxon Mobil and XTO Energy were culled by the author from pages 49-53 of Form S-4 filed by Exxon Mobil with the SEC on February 1, 2010. Because the reasons were quite voluminous, students were asked to "provide a concise, organized, analysis of these reasons consisting of approximately 250 words." The "author's solution" provided below reflects this objective. Economic Reasons cited by Management of Exxon Mobil: The merger will provide ExxonMobil access to XTO Energy's geographically dispersed uncon- ventional gas assets and oil shale resources for long-term production. The merger will provide Exxon Mobil access to XTO Energy's expertise in drilling capability and knowledge in well simulation. XTO employees are industry experts in unconventional gas types-tight gas, shale gas, coal bed methane, and shale oil. The merger will create synergies by combining XTO Energy's technical capabilities and oper- ating expertise with ExxonMobil's extensive research and development expertise, project management and financial resources. Author's personal copy 134 M. Schoderbek/J. of Acc. Ed. 29 (2011) 122-141 . The combined asset base will position the company as a global leader in the growing demand for natural gas and provide Exxon Mobil with a relatively low carbon profile. Economic Reasons cited by Management of XTO Energy: The merger provides XTO shareholders ownership in a more geographically widespread com- any with diverse products and greater proven reserves, resulting in an enhanced competitive and financial position. . ExxonMobil's global scale, financial resources, and diversified asset base is better positioned to drive growth and profitability in the face of increased competition in the U.S. unconven- tional natural gas exploration and production industry due to technological advancements in drilling methods and increased supply of natural gas. ased o 7098 shAcc. for Merg. & Rev. Merg._J. X Acc. for Merg. & Rev. Merg._J. X M Sign In | Connect | McGraw Hill X G The Merger Agreement On July X Homework Help - Q&A from Or X + - -> C @ File | /Users/trucdo/Downloads/Acc.%20for%20Merg.%20&%20Rev.%20Merg._J.%20of%20Acc.%20Ed._2011.pdf O* IT : Acc. for Merg. & Rev. Merg._J. of Acc. Ed._2011.pdf 14 / 21 1 100% + (2) Journal Entries on the books of Exxon Mobil to record the business combination, assuming XTO Energy is dissolved: Business Combination Expenses $ 18 Cash $ 18 To record direct costs of the merger. Investment in XTO Energy 24,659 Common Stock, no par $ 3,520 Treasury Stock 21,139 To record the consideration transferred. Cash and cash equivalents $ 47 Notes and accounts receivable 925 Inventories 170 Other current assets 911 Investments, advances and long-term receivables 52 Property, plant and equipment 47,300 Identifiable intangible assets 493 Goodwill 39 Other assets 75 Income taxes payable 199 Notes and loans payable $ 1,026 Accounts payable and accrued liabilities 1,788 Long-term debt 10,574 Postretirement benefits reserves 65 Deferred income tax liabilities 11,204 Other long-term obligations 895 Investment in XTO Energy 24,659 To record the net assets of XTO. 4.1.2. Teaching notes This merger assignment has been used several times in the Advanced Accounting course in the Rut- gers Business School's Undergraduate-New Brunswick program. The mergers examined have been re- placed numerous times to keep pace with the evolving accounting standards on business combinations. To gain a better understanding of why firms merge, the first question focuses on the rationale behind the merger. The reasons cited in the Form S-4 are both numerous and technical