Millicom is acquiring Vikonic's outstanding common stock for $15 million. Financial information (in $ millions) on these two firms prior to the acquisition is as follows: ?
? $$\begin{array} { l r r }
& \text { Millicom }& \text { Vikonic } \
\text { Total assets, book value } & \$ 90 & \$ 40 \
\text { Liabilities, book value } & 40 & 27 \
\text { Stockholders' equity, book value } & 50 & 13
\end{array}$$ ?
What are the total assets and stockholders' equity (in $ millions) if the pooling of interests method had been used as the accounting method for this merger?
A) ?$130; $63
B) ?$130; $67
C) ?$132; $65
D) ?$132; $67

Question

Millicom is acquiring Vikonic's outstanding common stock for $15 million. Financial information (in $ millions) on these two firms prior to the acquisition is as follows: ?
? $$\begin{array} { l r r } 
& \text { Millicom }& \text { Vikonic } \
\text { Total assets, book value } & \$ 90 & \$ 40 \
\text { Liabilities, book value } & 40 & 27 \
\text { Stockholders' equity, book value } & 50 & 13
\end{array}$$ ?
What are the total assets and stockholders' equity (in $ millions) if the pooling of interests method had been used as the accounting method for this merger?
A) ?$130; $63
B) ?$130; $67
C) ?$132; $65
D) ?$132; $67

Quizplus · Accepted Answer

Under the pooling of interests method, the assets and liabilities of the two companies are combined at their book values. Total assets would be $90 + $40 = $130 million, and stockholders' equity would be $50 + $13 = $63 million.

Millicom Is Acquiring Vikonic's Outstanding Common Stock for $15 Million