Assume the following balance sheets are stated at book value.
What will be the value of the equity account on the postmerger balance sheet assuming that Meat Co. purchases Loaf, Inc. and the pooling of interests method of accounting is used.
Postmerger equity = $28,900 + $9,400 = $38,300
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81.
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Assume the following balance sheets are stated at book value.
Suppose the fair market value of Loaf's fixed assets is $7,200 versus the $3,300 book value shown. Meat pays $10,200 for Loaf and raises the needed funds through an issue of long-term debt. Assume the purchase method of accounting is used. The post-merger balance sheet of Meat Co. will have total debt of ______ and total equity of ______.
Total post-merger debt = $1,800 + $1,100 + $900 + $500 + $10,200 = $14,500
Total post-merger equity = Pre-merger equity of acquiring firm = $11,500 |
82.
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Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms.
Assume the merger is treated as a pooling of interests for accounting purposes. The total assets are _____ and the total equity is _____ on the post-merger balance sheet.
Post-merger total assets = $17,400 + $10,100 = $27,500
Post-merger total equity = $11,300 + $8,100 = $19,400 |
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