Consider the following premerger information about Firm X and Firm Y: Total earnings Shares outstanding Per-share values: Market Book Firm X Firm Y $92,000 $20,500 49,000 14,000 LA LA $ 49 $ 18 $ 20 7
Consider the following premerger information about Firm X and Firm Y: Total earnings Shares outstanding Per-share values: Market Book Firm X Firm Y $92,000 $20,500 49,000 14,000 LA LA $ 49 $ 18 $ 20 7
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Consider the following premerger information about Firm X and Firm Y:
222
Total earnings
Shares
outstanding
Per-share values:
Market
Book
Firm X
$92,000
49,000
Assets from X
Assets from Y
Goodwill
Total Assets XY
LA GA
Firm Y
$20,500
14,000
49 $
18 $
20
7
zursurch
of
M
www.am
entrat human pa
grawe anakmuom
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Hoe o
Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a
merger premium of $7 per share, and that neither firm has any debt before or after the
merger. Construct the postmerger balance sheet for Firm X assuming the use of the
purchase accounting method. (Do not round intermediate calculations and round your
answers to the nearest whole number, e.g., 32.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F857bb132-1ca6-4c93-9282-83a3dca0fda6%2F298fef93-846b-43ed-b541-17dfbf38b977%2F7r21nm4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the following premerger information about Firm X and Firm Y:
222
Total earnings
Shares
outstanding
Per-share values:
Market
Book
Firm X
$92,000
49,000
Assets from X
Assets from Y
Goodwill
Total Assets XY
LA GA
Firm Y
$20,500
14,000
49 $
18 $
20
7
zursurch
of
M
www.am
entrat human pa
grawe anakmuom
2
Hoe o
Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a
merger premium of $7 per share, and that neither firm has any debt before or after the
merger. Construct the postmerger balance sheet for Firm X assuming the use of the
purchase accounting method. (Do not round intermediate calculations and round your
answers to the nearest whole number, e.g., 32.)
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