On January 2, 2012, Riser, Inc acquired Ven Pharmaceuticals for $2 billion cash, In a merger. Vaen had two promising products for treating common infections under review by the US Food and Drug Administration. The balance sheets of Fiser and Vixen, immediately prior to the acquisition, are below. Fair value information appears for Youn's reported assets and liabilities Fiser, Inc. Ven Pharmaceuticals in thousands Book Value Book Value Fair Value Current sets 5.000.000 5320.000 $320.000 Property, plant anderen 6.000.000 1.000.000 L00.000 Parts 16.000.000 Totales 5120.000.000 51.000 12.000 000.000 34.000.000.000 Tould $120.000.000 17.10.000 $1.6 billion of the purchase price was allocated to previously unreported in process research and development attributed to Vwen's products under development. The purchase price was low due to Vixen's poor performance in previous years-Viven reported a retained earnings deficit of $3.44 billion as of the date of acquisition. To dose the deal, Riser agreed to pay the former owners of Viven $2 for every dollar of total revenue above 580 million reported on sales of Vixen's products over the next two years. This payment. I madi- at all, would occur at December 31, 2013. Fiser expects that there is only a 20 percent chance the payment will be made, as followe Total expected revenue on Vixen's products, 2012-2013 Probability Below 50 milion 39 min 512 wlion 0.0 0.15 0.05 a Calculate the present value of the earnout a reement, using a percent discount rate Hound your answer to nearest thousand dollars) $4354 * On thousands th) This acquisition a bargain purchase Calculate the pain on acquisition reported by Fier 95,646 Xin thousands) 0 0 () Prepare the entry Fiser made to record the acquisition in thousands) General Journal Description Debit Credit Current assets 320,000 Property, plant and equipment 8,000,000 Patents 4,800,000 0 In-process R&D 1,600,000 Liabilities O 56,000,000 X Cash 0 2,000,000 Gain on acquisition 07 95,646 X 0 (d) Prepare Fiser's post-combination balance sheet (in thousands). Fiser, Inc. Balance Sheet January 3, 2012 (in thousands) Current assets $ 3,950,000 X Liabilities $ Property, plant and equipment 55,000,000 * Capital stock Patents 13,000,000 Retained earnings In-process research & development 1,000,000 X Total assets $ 7.295.000 x Total liabilities and equity 32,854,354 X 25,000,000 X 15.095,646 x 72,950.000 X On January 2, 2012, Fiser, Inc. acquired Vixen Pharmaceuticals for $2 billion cash, in a merger. Vixen had two promising products for treating common infections under review by the U.S. Food and Drug Administration. The balance sheets of Fiser and Vixen, immediately prior to the acquisition are below. Fair value information appears for Vixen's reported assets and liabilities Fiser, Inc. Vaen Pharmaceuticals (in thousands) Book Value Book Value Fair Value Current assets $8,000,000 $320.000 $320.000 Property, blant and equipment 96.000.000 10.000.000 3.000.000 Patents 10.000.000 300.000 4.300.000 Tetastets $120,000,000 157,120,000 511120,000 Ubilities 556.000 53.560.000 $12.500.000 Capital stock 0.000.000 LOC.000 Hanedamine 240.000 40.000 Total and quity $120.000.000 $17.120.000 51.6 billion of the purchase price was allocated to previously unreported in process research and development attributed to Vixen's products under development. The purchase price was low due to Vixen's poor performance in previous years.-- Ven reported a retained earnings deficit of $3.44 billion as of the date of acquisition. To close the dealiser agreed to pay the former owners of Vixen $2 for every dollar of total revenue above $80 million reported on sales of Vixen's products over the next two years. This payment. It made at all, would occur at December 31, 2013. Fiser expects that there is only a 20 percent chance the payment will be made, as follows Total expected revenue on Vixen's products. 2012 - 2013 Probability Below 590 million 0.80 596 million 5128 million 0.15 0,05 (a) Calculate the present value of the earnout agreement, using a 4 percent discount rate. (Round your answer to nearest thousand dollars) $ 4,354 X (in thousands) (b) This acquisition is a bargain purchase. Calculate the gain on acquisition reported by Fiser. 595.646 x in thousands) (a) Calculate the present value of the earnout agreement, using a 4 percent discount rate. (Round your answer to nearest thousand dollars.) $ 4,354 x in thousands) (b) This acquisition is a bargain purchase. Calculate the gain on acquisition reported by Fiser. $ 95,646 * (in thousands) () Prepare the entry Fiser made to record the acquisition in thousands) General Journal Description Debit Credit Current assets 320,000 Property, plant and equ omert 8.000.000 0 Patents 4.800,000 0 In-process RD 1.600.000 0 Babilities 0 56,000,000 X Cash O 2.000.000 Gain on acquisition 0 95.646 X (d) Prepare Fiser's post-combination balance sheet (in thousands). Fiser, Inc. Balance Sheet January 3, 2012 (in thousands) Current assets $ 3,950,000 X Liabilities $ Property, plant and equipment 55,000,000 x Capital stock Patents 13,000,000 Retained earnings In-process research & development 1,000,000 X Total assets $ 7.295,000 % Total liabilities and equity $ 32,854,354 X 25,000,000 X 15,095,646 * 72.950,000 X On January 2, 2012, Riser, Inc acquired Ven Pharmaceuticals for $2 billion cash, In a merger. Vaen had two promising products for treating common infections under review by the US Food and Drug Administration. The balance sheets of Fiser and Vixen, immediately prior to the acquisition, are below. Fair value information appears for Youn's reported assets and liabilities Fiser, Inc. Ven Pharmaceuticals in thousands Book Value Book Value Fair Value Current sets 5.000.000 5320.000 $320.000 Property, plant anderen 6.000.000 1.000.000 L00.000 Parts 16.000.000 Totales 5120.000.000 51.000 12.000 000.000 34.000.000.000 Tould $120.000.000 17.10.000 $1.6 billion of the purchase price was allocated to previously unreported in process research and development attributed to Vwen's products under development. The purchase price was low due to Vixen's poor performance in previous years-Viven reported a retained earnings deficit of $3.44 billion as of the date of acquisition. To dose the deal, Riser agreed to pay the former owners of Viven $2 for every dollar of total revenue above 580 million reported on sales of Vixen's products over the next two years. This payment. I madi- at all, would occur at December 31, 2013. Fiser expects that there is only a 20 percent chance the payment will be made, as followe Total expected revenue on Vixen's products, 2012-2013 Probability Below 50 milion 39 min 512 wlion 0.0 0.15 0.05 a Calculate the present value of the earnout a reement, using a percent discount rate Hound your answer to nearest thousand dollars) $4354 * On thousands th) This acquisition a bargain purchase Calculate the pain on acquisition reported by Fier 95,646 Xin thousands) 0 0 () Prepare the entry Fiser made to record the acquisition in thousands) General Journal Description Debit Credit Current assets 320,000 Property, plant and equipment 8,000,000 Patents 4,800,000 0 In-process R&D 1,600,000 Liabilities O 56,000,000 X Cash 0 2,000,000 Gain on acquisition 07 95,646 X 0 (d) Prepare Fiser's post-combination balance sheet (in thousands). Fiser, Inc. Balance Sheet January 3, 2012 (in thousands) Current assets $ 3,950,000 X Liabilities $ Property, plant and equipment 55,000,000 * Capital stock Patents 13,000,000 Retained earnings In-process research & development 1,000,000 X Total assets $ 7.295.000 x Total liabilities and equity 32,854,354 X 25,000,000 X 15.095,646 x 72,950.000 X On January 2, 2012, Fiser, Inc. acquired Vixen Pharmaceuticals for $2 billion cash, in a merger. Vixen had two promising products for treating common infections under review by the U.S. Food and Drug Administration. The balance sheets of Fiser and Vixen, immediately prior to the acquisition are below. Fair value information appears for Vixen's reported assets and liabilities Fiser, Inc. Vaen Pharmaceuticals (in thousands) Book Value Book Value Fair Value Current assets $8,000,000 $320.000 $320.000 Property, blant and equipment 96.000.000 10.000.000 3.000.000 Patents 10.000.000 300.000 4.300.000 Tetastets $120,000,000 157,120,000 511120,000 Ubilities 556.000 53.560.000 $12.500.000 Capital stock 0.000.000 LOC.000 Hanedamine 240.000 40.000 Total and quity $120.000.000 $17.120.000 51.6 billion of the purchase price was allocated to previously unreported in process research and development attributed to Vixen's products under development. The purchase price was low due to Vixen's poor performance in previous years.-- Ven reported a retained earnings deficit of $3.44 billion as of the date of acquisition. To close the dealiser agreed to pay the former owners of Vixen $2 for every dollar of total revenue above $80 million reported on sales of Vixen's products over the next two years. This payment. It made at all, would occur at December 31, 2013. Fiser expects that there is only a 20 percent chance the payment will be made, as follows Total expected revenue on Vixen's products. 2012 - 2013 Probability Below 590 million 0.80 596 million 5128 million 0.15 0,05 (a) Calculate the present value of the earnout agreement, using a 4 percent discount rate. (Round your answer to nearest thousand dollars) $ 4,354 X (in thousands) (b) This acquisition is a bargain purchase. Calculate the gain on acquisition reported by Fiser. 595.646 x in thousands) (a) Calculate the present value of the earnout agreement, using a 4 percent discount rate. (Round your answer to nearest thousand dollars.) $ 4,354 x in thousands) (b) This acquisition is a bargain purchase. Calculate the gain on acquisition reported by Fiser. $ 95,646 * (in thousands) () Prepare the entry Fiser made to record the acquisition in thousands) General Journal Description Debit Credit Current assets 320,000 Property, plant and equ omert 8.000.000 0 Patents 4.800,000 0 In-process RD 1.600.000 0 Babilities 0 56,000,000 X Cash O 2.000.000 Gain on acquisition 0 95.646 X (d) Prepare Fiser's post-combination balance sheet (in thousands). Fiser, Inc. Balance Sheet January 3, 2012 (in thousands) Current assets $ 3,950,000 X Liabilities $ Property, plant and equipment 55,000,000 x Capital stock Patents 13,000,000 Retained earnings In-process research & development 1,000,000 X Total assets $ 7.295,000 % Total liabilities and equity $ 32,854,354 X 25,000,000 X 15,095,646 * 72.950,000 X