Question
F. Corp J. Corp J. Corp Book Value Book Value Fair Value Cash & receivables $ 11,000 $ 300 $ 250 Inventory $ 12,500 $
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| F. Corp | J. Corp | J. Corp |
|
| Book Value | Book Value | Fair Value |
| Cash & receivables | $ 11,000 | $ 300 | $ 250 |
| Inventory | $ 12,500 | $ 1,700 | $ 3,450 |
| PP&E (net) | $ 28,000 | $ 2,500 | $ 4,100 |
|
| $ 51,500 | $ 4,500 | $ 7,800 |
| Current Payables | $ 7,500 | $ 550 | $ 600 |
| Long Term Debt | $ 14,000 | $ 2,000 | $ 1,700 |
|
| $ 21,500 | $ 2,550 | $ 2,300 |
| Net Assets | $ 30,000 | $ 1,950 | $ 5,500 |
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|
|
|
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| Equity: |
|
|
|
| Capital Stock at Par ($1) | $ 6,000 | $ 400 |
|
| Addt'l Paid In Capital | $ 5,000 | $ 700 |
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| Retained Earnings | $ 19,000 | $ 850 |
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| Total Equity | $ 30,000 | $ 1,950 |
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Suppose that F. Corp acquires 20% of the outstanding shares of J. Corp with cash of $2mm. J. Corp earns $100,000 each year in Net Income and its payout ratio is 15%. What will be the value on F. Corps balance sheet of this investment at the end of Year 3?
| A. | $2,106
| |
| B. | $2,267
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| C. | $2,451
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| D. | $2,064
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| E. | $2,051
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Internal Auditing As A Career
Authors: Richa Yamini Goel
1st Edition
B09RMBWZ2L, 979-8412866512
