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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: Silver Enterprises Current assets $ 5,100 Current liabilities $ 3,100 Other assets 1,500 Long-term debt 7,800 Net fixed assets 18,300 Equity 14,000         Total $ 24,900 Total $ 24,900         All Gold Mining Current assets $ 1,600 Current liabilities $ 1,410 Other assets 570 Long-term debt 0 Net fixed assets 8,000 Equity 8,760         Total $ 10,170 Total $ 10,170         Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase of interests for accounting purposes. The market value of All Gold Mining's fixed assets is $9,250; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,500 in new long-term debt to finance the acquisition.   Current assets   Current Liabilities   Other assets   Long-term debt   Net fixed assets   Equity   Goodwill       Total   Total

Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms: Silver Enterprises Current assets $ 5,100 Current liabilities $ 3,100 Other assets 1,500 Long-term debt 7,800 Net fixed assets 18,300 Equity 14,000         Total $ 24,900 Total $ 24,900         All Gold Mining Current assets $ 1,600 Current liabilities $ 1,410 Other assets 570 Long-term debt 0 Net fixed assets 8,000 Equity 8,760         Total $ 10,170 Total $ 10,170         Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase of interests for accounting purposes. The market value of All Gold Mining's fixed assets is $9,250; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,500 in new long-term debt to finance the acquisition.   Current assets   Current Liabilities   Other assets   Long-term debt   Net fixed assets   Equity   Goodwill       Total   Total

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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Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms:
Silver Enterprises
Current assets $ 5,100 Current liabilities $ 3,100
Other assets 1,500 Long-term debt 7,800
Net fixed assets 18,300 Equity 14,000
       
Total $ 24,900 Total $ 24,900
       
All Gold Mining
Current assets $ 1,600 Current liabilities $ 1,410
Other assets 570 Long-term debt 0
Net fixed assets 8,000 Equity 8,760
       
Total $ 10,170 Total $ 10,170
       

Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase of interests for accounting purposes. The market value of All Gold Mining's fixed assets is $9,250; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,500 in new long-term debt to finance the acquisition.

 

Current assets   Current Liabilities  
Other assets   Long-term debt  
Net fixed assets   Equity  
Goodwill      
Total   Total  

 

 

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