SPINOFF and REVERSE SPLIT: Motorola and Motorola Mobility

Issue: How do I enter the spinoff of Motorola Mobility from Motorola?

Cause: Motorola split the company into Motorola Solutions and Motorola Mobility. Motorola Solutions is considered the parent company. A reverse split and name change occurred to make Motorola Inc into Motorola Solutions.

The SEC filing for this spinoff can be found through the Motorola Solutions web site at:

http://files.shareholder.com/downloads/ABEA-58XVPR/1128242090x0xS1193125-10-152280/1495569/filing.pdf

The cost basis allocation information can be found on the Motorola Solutions web site at:

http://files.shareholder.com/downloads/ABEA-58XVPR/1128242090x0x433970/CA4880F4-6309-415E-B83C-27A8E806A42D/MSI_MMI_Tax_Basis_Allocation.pdf

Resolution:

This action will need three entries in the accounting software. The information below is based on the information available from Motorola including the Form 10 filed with the SEC.

The Spinoff Entry

Go to Transactions > Spinoff or Accounting > Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this url: http://www.iclub.com/support/kb/default.asp?page=normal_spinoff

Here is the information you need to complete the spinoff.

Date: 1/3/2011

Select Parent Security (or Parent Company) : Motorola (MOT)

Remaining Basis Percentage: 57.75

Cash received:See your broker statement for cash-in-lieu received

Spinoff Security (or Symbol of New Company) : Motorola Mobility (MMI)

Shares received : .125 x (#of MOT shares owned) (Remember to include fractional shares.)

For example, if you owned 100 MOT shares, you should receive .125 x 100 = 12.5 MMI shares.

Price Per Share : Divide the Fractional Shares determined above by the Cash Received amount

Save the transaction and the spinoff has been entered.

The Reverse Split Entry

Go to Transactions > Stock Split or Accounting > Securities > Record stock split depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this url: http://www.iclub.com/support/kb/default.asp?page=normal_split

Here is the information you need to complete the reverse split.

Date: 1/4/2011

Split Ratio : 1 for 7

Select Security : (or Symbol) Motorola (MOT)

Cash for Fractional Share : See your broker statement. Do not confuse the amount with the cash received for fractional shares in the spinoff described above.

Save the transaction and the reverse split has been entered.

The Name Change Entry

For Club Accounting 3 do the following:

Click Securities. Double click on Motorola

Change Security Name to Motorola Solutions.

Change Ticker Symbol to MSI.

Click OK button.

For Online Club Accounting do the following:

Click Securities. Click the Update Security settings link.

Click Edit next to Motorola (MOT) .

Change Company Name to Motorola Solutions.

Change Symbol to MSI.

Click Submit button.

You have now completed all the entries to account for this transaction.

Revised 2/28/2011