2. 2.

Statements of financial position for mergers [LO 26.2] Consider the following pre-merger information about Firm X and Firm Y:

1.
Assume that Firm X acquires Firm Y by issuing new non-current debt for all the shares outstanding at a merger premium of $6 per share. Assuming that neither firm has any debt before the merger, construct the post-merger statement of financial position for Firm X under the purchase accounting method.

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Firm X Firm Y Total earnings $85000 $11000 Shares outstanding 30000 8 000 Per-share values: Market S 58 $ 13 Book $ 6 $ 2