Coca Cola and Costa Coffee (Please answer)
What form of business combination brought the two companies together, and what was the resulting corporate structure? How did the firms account for the acquisition? How did the firms account for its acquisition-related expenses? Was there any contingent consideration? If so, how much?
What was the cost of the merger? 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 firms 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?
What was the impact 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?
