On February 25, 2009, Abbott Laboratories acquired 100 percent of the equity of Advanced Medical Optics Corporation

Question:

On February 25, 2009, Abbott Laboratories acquired 100 percent of the equity of Advanced Medical Optics Corporation in exchange for $1.4 billion cash. Referring to Abbott’s 2009 financial statements, answer the following:

1. How did Abbott account for the Advanced Medical Optics acquisition?

2. What allocations did Abbott make to the assets acquired and liabilities assumed in the acquisition?

Provide a calculation showing how Abbott determined the amount allocated to goodwill.

3. How will Abbott account for the in-process research and development acquired in the combination?

4. How will Abbott account for its acquisition-related expenses?

5. Why did Abbott acquire Advanced Medical Optics?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...