2. 4.

Statements of financial position for mergers [LO 26.2] Ballarat Silver Limited has acquired All Gold Mining in a merger transaction.

Construct the statement of financial position for the new company if the merger is treated as an acquisition for accounting purposes. The following statements of financial position represent the pre-merger book values for both firms:

The market value of All Gold Mining’s non-current assets is $9 300;
the market values for current and other assets are the same as the book values. Assume that Ballarat Silver Limited issues $16 000 in new noncurrent debt to finance the acquisition.

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Ballarat Silver Limited Current assets $ 5 700 Current liabilities $ 3100 Other assets 1 600 Non-current debt 8150 Net non-current assets 18400 Equity 14450 Total $25 700 Total $25 700 All Gold Mining Current assets $1 600 Current liabilities $1 590 Other assets 680 Non-current debt 0 Net non-current assets 7400 Equity 8 090 Total $9 680 Total $9 680