Prepare a worksheet to consolidate prestige and booking

Assignment Help Finance Basics
Reference no: EM131119147

Exhibit 7.34 presents the separate financial statements at December 31, 2011, of Prestige Resorts and its 80 percent-owned subsidiary Booking, Inc. Two years earlier on January 1, 2010, Prestige acquired 80 percent of the common shares of Booking for $1,170 million in cash. Booking's 2010 net income was $105 million, and Booking paid no dividends in 2010. Booking's 2011 income was $135 million, and it paid $75 million dividends on common stock during 2011. Booking's pre- and post-acquisition stock prices do not support the existence of a control premium. Exhibit 7.35 shows the allocation of fair value at the date of acquisition, January 1, 2010. Exhibit 7.36 traces Prestige Resorts' equity method accounting for Booking, Inc. Ignore deferred tax effects.

Required

a. Complete Exhibit 7.35 to show income effects and balance sheet adjustments to be reflected in the December 31, 2011 Eliminations column of the consolidated worksheet.

b. Complete Exhibit 7.36 to trace the noncontrolling interests in Booking, Inc.'s earnings and net assets.

c. Prepare a worksheet to consolidate Prestige and Booking at December 31, 2011.

Reference no: EM131119147

Questions Cloud

True of house path-goal theory : Which of the following is true of House's path-goal theory?
Consumer goods manufacturer uses periodic review system : A consumer goods manufacturer uses a periodic review system to manage field inventories. This means, once a period, field inventory clerks check to see if inventory is below reorder point; if so thay order an amount equal to the EOQ. The materials ma..
The company uses the periodic inventory method : Merchandise inventory costing $18,200 was in the warehouse at December 31, 2009, but was incorrectly omitted from the physical count at that date. The company uses the periodic inventory method.
Continuous improvement project to reduce defects : You have been hired as a new procurement and supply manager at a company that manufactures and assembles construction equipment. The management team is not satisfied with the cost to manufacture and assemble the construction equipment as well as the ..
Prepare a worksheet to consolidate prestige and booking : Complete Exhibit 7.35 to show income effects and balance sheet adjustments to be reflected in the December 31, 2011 Eliminations column of the consolidated worksheet. Complete Exhibit 7.36 to trace the noncontrolling interests in Booking, Inc.'s earn..
Explain the important characteristics of risk management : You are a procurement manager for a company that manufactures and assembles construction equipment. Your supervisor has asked you to develop a new strategy for risk management and procurement management that will offer a competitive advantage in the ..
Describe the security issues of bcbst in regard to integrity : Describe the security issues of BCBST in regard to confidentiality, integrity, availability, and privacy based on the information provided in the BCBST case.
Record the merger using the financial statement effects : Record the merger using the financial statement effects template or journal entries. How would the financial effects change if the cash paid was $2,000,000?
Determine the constant rate of change : Determine the constant rate of change and what is the change in y (i.e. Δy )that corresponds with Δx found in part (b)?

Reviews

Write a Review

Finance Basics Questions & Answers

  Create an ios chart with the investment

The WACC is 7.75% with break points at $13 million and a new WACC of 8.12%. A final breakpoint occurs at $25 million boosting the WACC to 9.25%. Your banker has told you that beyond $25 million you will not be extended additional credit.

  Would you say that the laboratory course increases the

a study was made to determine if the subject matter in a physics course is better understood when a lab constitutes

  Marketable securities for the lockbox

What annual before-tax yield must Flashbinder Guitars, Inc. earn on its marketable securities for the lockbox system to be beneficial?

  How can you "fit" a spot-rate tree to these bond prices

(a) How can you "fit" a spot-rate tree to these bond prices? Discuss.(b) Obtain a tree consistent with the term structure given above,(c) What are the differences, if any, between the tree approaches in Questions (a) and (b)?

  Differences between book value-liquidation value

Discuss the basic differences between book value, liquidation value, market value, and intrinsic value. Explain the three factors that determine the intrinsic, or economic, value of an asset. As an investor, explain why these concepts are importan..

  Compute the present equivalent cost

The initial cost of the rig is $45000 and the estimated salvage value after four years is $15000. Compute the present equivalent cost of the rig using 12% interest rate.

  Famas llamas has a wacc of 105 the companys cost of equity

famas llamas has a wacc of 10.5. the companys cost of equity is 14 and its cost of debt is 8. the tax rate is 30. what

  Percision engineering recently announced that its next

percision engineering recently announced that its next annual div will be 1.20 per share with later dividents

  What would happen to the required rates of return

Assume the long-run growth rate of the economy increased by 1 percent and the expected rate of inflation increased by 4 percent. What would happen to the required rates of return on government bonds and common stocks? Show graphically how the effects..

  Determining the project net present value

What is the project's net present value at an 18% required rate of return?

  What is the mortgage balance at the end of ten years

A mortgage has an original principal of $2,275,00 amortized over 25 years in monthly payments at 9.5% per annum interest. a) What is the monthly payment? b) What is the mortgage balance at the end of ten years?

  Present value help

Basic Buildings Inc. has decided to go public with a $5,000,000 new equity issue. Its investment bankers agreed to take a smaller fee now (6 percent of par value versus 10 percent) in exchange for a 1-year option to purchase an additional 200,000 ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd