Use an Internet search on the acquirer involved in your merger to answer the following:

What information is available about merger activity for the acquirer last $5$ years not including the merger you are studying?

What were their most significant acquisitions other than the one you are studying?

What is the business strategy underlying the company's overall merger activity?

How are the acquisitions financed $($stock$,$ cash, debt, or some combination$)?$

Are the acquisitions vertical, horizontal, or conglomerate mergers?

Visit the website of the acquiring company. Access the investor relations link and find the annual report from the year of the merger and from the previous and subsequent years. If it is not there, go to the SEC's website at www$.$sec$.$gov. Do not use financial statements from Yahoo!, Google, or any other site. Answer the following:

What was the business strategy underlying this merger?

How was this acquisition financed $($stock$,$ cash, debt, or some combination$)?$

Was this acquisition a vertical, horizontal, or conglomerate merger?

Answer the following using the financial statements in the year after your merger closed:

What form of business combination $($statutory merger, statutory consolidation, stock acquisition, asset acquisition$)$ brought the two companies together, and what was the resulting corporate structure?

What was the cost of the merger? any acquisition$-$related expenses? any contingent consideration? How was that cost allocated $($What allocations were made to the assets acquired and liabilities assumed in the acquisition$)?$

Was goodwill recorded? If so$,$ how much? If not, was it considered a bargain purchase? Provide a calculation showing how the acquirer determined the amount allocated to goodwill or bargain purchase.

Was there in$-$process research and development acquired in the combination? If so$,$ how did the firms account for it$?$ Were other intangible assets acquired in the combination? What were they and how did the firms account for them?

Did the acquirer recognize any acquired contingencies for its acquisition? If it did, how were they measured? If not, why not? Under what circumstances should a firm recognize an asset acquired or a liability assumed in a business combination that arises from a contingency? How should the firms account for its acquired contingencies in periods after the acquisition date? What is the disclosure requirement for any acquired contingencies?

Show the impact $($dollar and percent change$)$ of the merger on

Cash?

net accounts receivable?

Inventories?

long term assets?

accounts payable?

long term debt?

Based on your knowledge, what journal entry do you think the acquirer prepared for the combination? Write the journal entry out.

Answer rating: 100% (QA)

1 Merger Activity in the Last 5 Years Search for news articles press releases or financial reports discussing the acquirers merger activity over the p... View the full answer