Accounting, Finance

Problem Description

Main, Inc. is contemplating a impression stomach to acquire 80 share of subordinate Corporations common stock. Subsidiarys shargons are currently quoted on the New York Stock Exchange at $85 per share. In order to drop a reasonable chance of the tender offer attracting 80 percent of Subsidiarys stock, Main believes it will digest to offer at least $105 per share. If the tender offer is made and is successful, the purchase will be consummated on January 1, 2004.
A typical part of the planning of a proposed crinkle combination is the preparation of projected or pro forma coalesced fiscal statements. As a member of Mains accounting group, you have been asked to prepare the pro forma 2004 consolidated monetary statements for Main and Subsidiary assuming that 80 percent of Subsidiarys stock is acquired at a price of $105 per share. To support your computations, Dave Johnson, the chairperson of Mains acquisitions committee, has provided you with the projected 2004 financial statements for Subsidiary. (The projected financial statements for Subsidiary and several other companies were lively earlier for the acquisition committees use in targeting a ships company for acquisition.) The projected financial statements for Subsidiary for 2004 and Mains actual 2003 financial statements are presented in table 1.

Assumptions

Mr.



Johnson has asked you to use the following assumptions to project Mains 2004 financial statements:
Sales will increase by 10 percent in 2004.
All sales will be on account.
Accounts receivable will be 5 percent glare on December 31, 2004, than on December 31, 2003.
Cost of goods exchange will increase by 9 percent in 2004.
All purchases of merchandise will be on account.
Accounts account payable are expected to be $50,500 on December 31, 2004.
store will be 3 percent higher on December 31, 2004, than on December 31, 2003.
Straight-line depreciation is used for...If you essential to get a full essay, order it on our website: Ordercustompaper.com



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