Suppose that GGI management decided against a 100% purchase, instead offering $36 cash (rather than stock)...

 

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Suppose that GGI management decided against a 100% purchase, instead offering $36 cash (rather than stock) for 60% of DC. How much would GFI then record on the its balance sheet for: (i) goodwill, and (ii) non- controlling interests? Goodwill? Non-controlling interests? Toward the end of 2022 the management of GFI Communications considered a controlling acquisition of Dakota Company (DC). An acquisition project team had been formed to assess the impact of the acquisition on GFI's consolidated financial statements. The acquisition was expected to be completed on December 31, 2022, 100% of the outstanding shares of DC would be acquired using $60 of newly issued GFI stock. The project team has projected the following balance sheets for GFI and DC, and fair values of DC, as of December 31, 2022: Balance Sheets as of December 31, 2022 (in millions, rounded) GFI Book Value Cash $ 37 Receivables 12 PPE (net) 68 Other Assets 20 232 Goodwill 10 DC Book Value Fair Value $ 7 $ 7 10 11 25 36 12 23 3 Total Assets $ 147 $ 57 Operating Liabilities $ 30 S 4 Long-term Debt Retained Earnings Common Stock Accounts Liabilities and Equity 28 43 53 87 6 2 4 $ 147 $ 57 Suppose that GGI management decided against a 100% purchase, instead offering $36 cash (rather than stock) for 60% of DC. How much would GFI then record on the its balance sheet for: (i) goodwill, and (ii) non- controlling interests? Goodwill? Non-controlling interests? Toward the end of 2022 the management of GFI Communications considered a controlling acquisition of Dakota Company (DC). An acquisition project team had been formed to assess the impact of the acquisition on GFI's consolidated financial statements. The acquisition was expected to be completed on December 31, 2022, 100% of the outstanding shares of DC would be acquired using $60 of newly issued GFI stock. The project team has projected the following balance sheets for GFI and DC, and fair values of DC, as of December 31, 2022: Balance Sheets as of December 31, 2022 (in millions, rounded) GFI Book Value Cash $ 37 Receivables 12 PPE (net) 68 Other Assets 20 232 Goodwill 10 DC Book Value Fair Value $ 7 $ 7 10 11 25 36 12 23 3 Total Assets $ 147 $ 57 Operating Liabilities $ 30 S 4 Long-term Debt Retained Earnings Common Stock Accounts Liabilities and Equity 28 43 53 87 6 2 4 $ 147 $ 57