Question
NYZ Corporation had the following Balance Sheet December 31, 2018 ASSETS Cash. $50,000 Accounts Receivable 80,000 Inventory 70,000 Total Current Assets 150,000 Property, Plant and
NYZ Corporation had the following
Balance Sheet
December 31, 2018
ASSETS
Cash. $50,000
Accounts Receivable 80,000
Inventory 70,000
Total Current Assets 150,000
Property, Plant and Equipment (net) 200,00
Long Term Investments 50,000
Goodwill 100,000
Total Assets $500,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $130,000
Accrued Expenses $120,000
Total Current Liabilities $250,000
Long-Term debt $150,000
Stockholders' Equity
common stock 10,000
Paid-In Capital 40,000
Retained Earnings 50,000
Total Liabilities & Stockholders' Equity $500,000
ALL REQUIRED
ABC Company is thinking about purchasing XYZ Corporation to merge into operations. You will need to first compute a Debt/Assets ratio BEFORE any adjustments AND explain what it means. Then, based solely on the above-provided balance sheet numbers and our class discussion, what adjustments or write-offs, if any, would you make in valuing XYZ Corporation? If no adjustments need to be made then be sure to clearly state that no adjustments are necessary. Also, IF you made any adjustments then you will need to compute another adjusted Debt/Asset ratio. Your Debt/Assets ratio(s) must include a brief discussion of any insights you have.
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Using Microcomputers In Managerial Accounting
Authors: George Hildebrand
1st Edition
0938188275, 978-0938188278
