Answer:
Metro and Medec
METRO
Post-merger Financial Position, using the pooling of interest method:
Pre-merger Financial Positions:
Metro (RM
‘000)
Assets
Current assets 120
Fixed assets 830
Total assets 950
Liabilities and Equities
Current liabilities 40
Long term debt 200
Common stock (RM1 par) 480
Capital surplus 120
Retained earnings 110
Total liabilities and equity 950
Earnings available to
common stockholders 230
Common Dividends 150
Addition to Retained Earnings 80
Step-by-step explanation:
Pre-merger Financial Positions:
Metro (RM
‘000) Medec(RM ‘000)
Assets
Current assets 50 70
Fixed assets 650 180
Total assets 700 250
Liabilities and Equities
Current liabilities 30 10
Long term debt 140 60
Common stock (RM1 par) 400 80
Capital surplus 50 70
Retained earnings 80 30
Total liabilities and equity 700 250
Earnings available to
common stockholders 100 130
Common Dividends 50 100
Addition to Retained Earnings 50 30
Exchange ratio = 1:2
