4 Following the acquisition of ZZA company during Year 20X8, ABC Corporation released its Year 20X8...
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4 Following the acquisition of ZZA company during Year 20X8, ABC Corporation released its Year 20X8 financial statements. The Year 20X8 financial statements and other data are reproduced below. ABC Corporation Balance Sheet December 31, Assets Non-current assets Property, plant, and equipment, net Goodwill, net Investments Current assets Inventories Accounts receivable Cash and cash equivalents Total assets Liabilities and Stockholders' Equity Short-term debt Accounts payable Accrued liabilities Income taxes payable Dividends payable Current liabilities 20X8 $ mil. 8,648 15,071 3,260 26,979 5,384 2,222 168 34,753 1,259 1,777 3,848 1,089 260 8,233 20X7 $ mil. 6,582 4,052 3,665 14,299 4,154 2,065 90 20,608 1,440 791 2,277 727 213 5,448 + + Long-term debt Deferred income taxes Stockholders' equity Total liabilities and stockholders' equity ABC corporation Income Statement For the Year Ending December 31, 20X8 Sales Cost of goods sold Selling and administrative expenses Depreciation expense Goodwill amortization Interest expense Pre-tax income Income tax expense Net Income Note: Dividends declared, $941 million + ABC corporation purchase of ZZA company Allocation of Purchase Price Accounts receivable Inventories Property, plant, and equipment Goodwill Short-term debt 17,122 1,719 7,679 34,753 Accounts payable Accrued liabilities Long-term debt Purchase price (net of cash acquired) 6,293 2,044 6,823 20,608 $ mil. 31,742 (12,156) (14,410) (654) (125) (670) 3,727 (1,390) 2,337 $ mil. 758 1,232 1,740 10,361 (700) (578) (530) (900) 11,383 Required: a. Prepare a statement of cash flows (indirect method) for ABC Corporation. (Hint: Acquisition of ZZA company requires you to remove the assets acquired and liabilities incurred as a result of that acquisition from the balance sheet before computing changes used in preparing the statement of cash flows. ABC Corporation pays $11.383 billion for ZZA company, net of cash acquired-see the Allocation of Purchase Price table.) 4 Following the acquisition of ZZA company during Year 20X8, ABC Corporation released its Year 20X8 financial statements. The Year 20X8 financial statements and other data are reproduced below. ABC Corporation Balance Sheet December 31, Assets Non-current assets Property, plant, and equipment, net Goodwill, net Investments Current assets Inventories Accounts receivable Cash and cash equivalents Total assets Liabilities and Stockholders' Equity Short-term debt Accounts payable Accrued liabilities Income taxes payable Dividends payable Current liabilities 20X8 $ mil. 8,648 15,071 3,260 26,979 5,384 2,222 168 34,753 1,259 1,777 3,848 1,089 260 8,233 20X7 $ mil. 6,582 4,052 3,665 14,299 4,154 2,065 90 20,608 1,440 791 2,277 727 213 5,448 + + Long-term debt Deferred income taxes Stockholders' equity Total liabilities and stockholders' equity ABC corporation Income Statement For the Year Ending December 31, 20X8 Sales Cost of goods sold Selling and administrative expenses Depreciation expense Goodwill amortization Interest expense Pre-tax income Income tax expense Net Income Note: Dividends declared, $941 million + ABC corporation purchase of ZZA company Allocation of Purchase Price Accounts receivable Inventories Property, plant, and equipment Goodwill Short-term debt 17,122 1,719 7,679 34,753 Accounts payable Accrued liabilities Long-term debt Purchase price (net of cash acquired) 6,293 2,044 6,823 20,608 $ mil. 31,742 (12,156) (14,410) (654) (125) (670) 3,727 (1,390) 2,337 $ mil. 758 1,232 1,740 10,361 (700) (578) (530) (900) 11,383 Required: a. Prepare a statement of cash flows (indirect method) for ABC Corporation. (Hint: Acquisition of ZZA company requires you to remove the assets acquired and liabilities incurred as a result of that acquisition from the balance sheet before computing changes used in preparing the statement of cash flows. ABC Corporation pays $11.383 billion for ZZA company, net of cash acquired-see the Allocation of Purchase Price table.)
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To prepare a statement of cash flows for ABC Corporation using the indirect method well start with the net income from the income statement and make adjustments for changes in working capital from the ... View the full answer
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781260881240
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
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