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.)
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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Consider the following premerger information about Firm X and Firm Y:
Firm X Firm Y
$96,000 $22,500
53,000 18,000
Total earnings
Shares
outstanding
Per-share values:
Market
Book
$
$
Assets from X
Assets from Y
Goodwill
Total Assets XY
53 $
14 $
18
00
8
Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a
merger premium of $5 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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