Sun Company is contemplating a tender offer to acquire 80% of Moon Corporation's common stock. Moon's shares are currently quoted on the New York Stock Exchange at $25 per share. In order to have a reasonable chance of the tender offer attracting 80% of Moon's stock, Sun believes it will have to offer at least $30 per share. If the tender offer is made and is successful, the purchase will be consummated on January 1, 2024. Michael Jackson, the chairperson of Sun's acquisitions committee, has provided you with the projected 2024 financial statements for Sun Company without the proposed acquisition and the 2024 Projected Financial Statements of the Moon Company in the table below. Sun Company's Projected Financial Statements for 2024 Without Acquisition and Moon Company's Projected Financial Statements for 2024 \begin{tabular}{|l|l|l|} \hline Retained earnings, January 1 & 11,660 & 4,800 \\ \hline Add: net income & 11,160 & 8,400 \\ \hline Less: dividends & (5,000) & (1,500) \\ \hline Retained earnings, December 31 & 17,820 & 11,700 \\ \hline & & \\ \hline Cash & 20,170 & 7,500 \\ \hline Accounts receivable & 13,775 & 4,300 \\ \hline Inventory & 12,875 & 4,000 \\ \hline Property, plant, and equipment & 228,000 & 50,000 \\ \hline Accumulated depreciation & (176,000) & (9,000) \\ \hline Total assets & 98,220 & 56,800 \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline & Sun2024ProjectedFinancialStatementsWithoutAcquisition & Moon2024ProjectedFinancialStatements \\ \hline Accounts payable & 13,400 & 7,000 \\ \hline Common stock & 65,000 & 30,000 \\ \hline Paid-in capital in excess of par & 2,000 & 8,100 \\ \hline \end{tabular} Additional Information As of January 1, 2024, all of Moon Company's assets and liabilities are fairly valued except for machinery with a book value of $5,000, an estimated fair value of $6,000, and a 5-year remaining useful life. Assume that straight-line depreciation is used to amortize any revaluation increment. No transactions between these companies occurred prior to 2024. Regardless of whether they combine, Sun Company plans to buy $15,000 of merchandise from Moon Company in 2024 and will have $1,200 of these purchases remaining in inventory on December 31, 2024. In addition, Moon is expected to buy $900 of merchandise from Sun in 2024 and to have $150 of these purchases in inventory on December 31,2024 . Sun and Moon price their products to yield a 20% and 25% markup on cost, respectively. Sun Company intends to use three financial yardsticks to determine the financial attractiveness of the combination. First, Sun wishes to acquire Moon only if 2024 consolidated earnings per share will be at least as high as the earnings per share Sun would report if no combination takes place. Second, Sun will consider the proposed combination unattractive if it will cause the consolidated current ratio to fall below two to one. Third, return on average stockholders' equity must remain above 20% for the combined entity. If the financial yardsticks described above and the nonfinancial aspects of the combination are appealing, then the tender offer will be made. On the other hand, if these objectives are not met, the acquisition will either be restructured or abandoned Requirements 1. Prepare Pro forma financial statements of Sun Company to reflect the proposed acquisition. Adjust Sun's pro forma 2024 financial statements given in the scenario to reflect the proposed acquisition (i.e., adjust Sun's projected financial statements for bond issuance, stock purchase, income from Sun Company, etc.). Support your statements with appropriate work papers and journal entries. Pro forma financial statements include a statement of operation, a statement of retained earnings, and a balance sheet. 2. Prepare a pro forma consolidated worksheet for Sun Company and its proposed subsidiary Moon Company as of December 31, 2024. To ensure you are starting with the right numbers, use the solution you prepared for requirement 1 for the adjusted pro forma 2024 financial statements of Sun Company, and the projected 2024 financial statements of Moon Company given in the scenario. Show all consolidation adjusting entries, including minority interest entries. 3. Perform ratio analysis. Compute earnings per share, current ratio, and return on average stockholders' equity for (i) the 2024 projected financial statements of Sun Company without acquisition as given in the question; and (ii) the consolidated financial statements contained in the pro forma consolidation worksheet prepared in requirement \#2 of Phase I. 4. Prepare a narrated PowerPoint presentation summarizing the results of your analysis, including a summary of the financial ratios you computed and your recommendation