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Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y $ 12,000 9,000 Total earnings Shares outstanding Pre-share values: Market Book $ 95,000 20,000 Assets from X Assets from Y Goodwill Total assets XY $63 $6 $15 $2 Assume that Firm X acquires Firm Y by issuing long-term debt for all the shares outstanding at a merger premium of $5 per share, and that neither firm has any debt before the merger. List the assets of the combined firm assuming the purchase accounting method is use

Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y $ 12,000 9,000 Total earnings Shares outstanding Pre-share values: Market Book $ 95,000 20,000 Assets from X Assets from Y Goodwill Total assets XY $63 $6 $15 $2 Assume that Firm X acquires Firm Y by issuing long-term debt for all the shares outstanding at a merger premium of $5 per share, and that neither firm has any debt before the merger. List the assets of the combined firm assuming the purchase accounting method is use

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y $ 12,000 9,000 Total earnings Shares outstanding Pre-share values: Market Book $ 95,000 20,000 Assets from X Assets from Y Goodwill Total assets XY $63 $6 $15 $2 Assume that Firm X acquires Firm Y by issuing long-term debt for all the shares outstanding at a merger premium of $5 per share, and that neither firm has any debt before the merger. List the assets of the combined firm assuming the purchase accounting method is used.
Transcribed Image Text:Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y $ 12,000 9,000 Total earnings Shares outstanding Pre-share values: Market Book $ 95,000 20,000 Assets from X Assets from Y Goodwill Total assets XY $63 $6 $15 $2 Assume that Firm X acquires Firm Y by issuing long-term debt for all the shares outstanding at a merger premium of $5 per share, and that neither firm has any debt before the merger. List the assets of the combined firm assuming the purchase accounting method is used.
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