财务报表分析与运用杰拉尔德 课后答案英文版第十四章.docVIP

Chapter 14 - Solutions Overview: Problem Length Problem #s {S} 6 - 11 {M} 1 - 5 {L} 12 - 13 1.{M}a. Martin Sales (Amounts in $millions) Method 2000 2001 2002 Purchase method $435 $610 ($550 + $60) $1,120 ($970 + $150) Pooling method $525 ($435 + $90) $670 ($550 + $120) $1,120 (same) Under the purchase method, Martins sales include Greens sales only following the acquisition. Under the pooling method, Greens sales are included for all periods, and 2000 must be restated. Under the purchase method (IASB GAAP): The growth rate of reported sales is higher because past sales are not restated so that the addition of Greens sales following the merger increases reported sales. Return on equity is lower than under pooling. Income is reduced by higher depreciation as Greens property is recorded at its higher fair value, by higher interest expense due to amortization of the debt discount, and by amortization of any goodwill. Equity is increased by the market value of the additional Martin shares issued (under pooling, new Martin shares are added at book value). With lower income and higher equity, return on equity is reduced. Long-term debt-to-equity ratio is lower than under pooling. Debt is lower because, under the purchase method, Greens debt is recorded at its fair market value. Equity is increased by the market value of the additional Martin shares issued. With lower debt and higher equity, the ratio is reduced. Under the purchase method (US GAAP): The growth rate of reported sales is the same as reported under IASB GAAP. Return on year-end 2001 equity is higher than under IASB GAAP. Income is higher as there is no goodwill amortization. Equity is the same at the acquisition date, but slightly higher at year-end 2001 due to higher income. Long-term debt-to-equity ratio is the same as under IASB GAAP at the acquisition date. 2.{M}a. b. and d. Acetar Combined Balance Sheet End of Year 1 Year 2 Pooling Purchase Purchase Cash $ 150 $ 150 $ 200 Inventory