On February 9, 2005, Adolph Coors Company merged with Molson, Inc., in a transaction valued at approximately

Question:

On February 9, 2005, Adolph Coors Company merged with Molson, Inc., in a transaction valued at approximately $3,556.5 million (the Merger). As the accounting acquirer, Adolph Coors Company became the parent of the merged companies and changed its name to Molson Coors Brewing Company (MCBC). The combined company was the world's fifth largest brewer at the time with combined annual volume of approximately 40 million barrels.
The Merger involved the exchange of 46.7 million equivalent shares of stock at a market price of $75.25 per share, the exchange of stock options valued at $4.0 million, and Merger-related costs incurred by Coors, of which $16 million was incurred prior to the Merger. The allocation of the purchase price according to the preliminary fair values of the assets acquired and liabilities assumed at the Merger date appears below.

Required
a. Because this merger occurred before 2009, MCBC capitalized Merger-related costs. Compute the amount of Merger-related costs incurred and capitalized, excluding the $16 million that apparently was expensed before the Merger.
b. Based on the above information, and assuming the Merger-related costs calculated in part a were paid in cash, prepare the entry made by Adolph Coors Company to record the Merger following GAAP in effect in 2005.
c. Suppose instead that the Merger was accomplished as a stock acquisition. Assume that fair values approximated book values except for goodwill and the intangible assets, all of which were capitalized per GAAP. Prepare the working paper entries needed for a consolidated balance sheet as of February 9,2005.
d. Had the Merger occurred pursuant to current U.S. GAAP, what item(s) in the entries in parts b and c above would be affected, and by how much?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...