The shares are classified as securities available for sale

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Reference no: EM131462082

Suppose that Company XYZ is considering purchasing shares of Company ABC. ABC has 30 million shares outstanding and trades at $60 per share on January 1, 2015. ABC shares trade at $62 per share as of December 31, 2015 and pay a dividend of $1 per share in 2015. Net income of ABC for 2015 is $4 per share ($120 million in total).

12.On January 1, 2015, XYZ purchases 1 million shares of Polaris for $60 million in cash. The shares are classified as securities available for sale.

Effect on 2015: Pretax Income: $____________

Total Assets: $____________

Total Shareholder’s Equity: $____________

Reference no: EM131462082

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