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.)

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
$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.)
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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