The Managers of Savage Company Own 10,000 of Its 100,000

question 23

Essay

The managers of Savage Company own 10,000 of its 100,000 outstanding common shares.Swann Company is formed by the managers of Savage Company to take over Savage Company in a leveraged buyout.The managers contribute their shares in Savage Company and Swann Company then borrows $675,000 to purchase the remaining 90,000 shares of Savage Company for $600,000; the remaining $75,000 is used for working capital.Savage Company is then merged into Swann Company effective January 1,2016.Data relevant to Savage Company immediately prior to the leveraged buyout follow:
Required:
A.Prepare journal entries on Swann Company's books to reflect the effects of the leveraged buyout.
B.Determine the balance of each of the following immediately after the merger:
1.Current Assets
2.Plant Assets
3.Note Payable
4.Common Stock

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Analyze statistical data to make informed decisions.

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Differentiate between source traits and surface traits according to Cattell's theory.

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Definitions:

Urine

A liquid by-product of metabolism in humans and many animals, expelled through the urinary system.

Bacteria

Microscopic, single-celled organisms that thrive in diverse environments, some of which can cause diseases.

Specimens

Samples or examples used for scientific testing or analysis.

Liquid Preparation

A form of medication that is administered in a liquid format, often used for ease of ingestion or to allow for immediate absorption.