1. Assume Bed Bath & Beyond acquires 100 percent of Pier 1, and that the transaction...

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1. Assume Bed Bath & Beyond acquires 100 percent of Pier 1, and that the transaction takes place at fiscal year end 2001. Prepare a consolidating balance sheet to reflect the acquisition at time of acquisition. Then, prepare an income statement for fiscal year 2002, the year following the acquisition. Assume that: ▪ The book values of Pier 1's assets and liabilities are equal to their fair mark values. ▪ There is a total of $500 million in identifiable intangible assets, which will be amortized for 20 years using the straight-line method. ▪ The tax rate is 38 percent. 1. Assume Bed Bath & Beyond acquires 100 percent of Pier 1, and that the transaction takes place at fiscal year end 2001. Prepare a consolidating balance sheet to reflect the acquisition at time of acquisition. Then, prepare an income statement for fiscal year 2002, the year following the acquisition. Assume that: ▪ The book values of Pier 1's assets and liabilities are equal to their fair mark values. ▪ There is a total of $500 million in identifiable intangible assets, which will be amortized for 20 years using the straight-line method. ▪ The tax rate is 38 percent.

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