Balance Sheets for Mergers Assume that the following balance sheets are stated at book value. The fair market value of James’ fixed assets is equal to the book value. Jurion pays $15,000 for James and raises the needed funds through an issue of long-term debt. Construct a postmerger balance sheet assuming that Jurion Co.

purchases James, Inc., and the purchase method of accounting is used.

Jurion Co.

Current assets $18,000 Current liabilities $ 5,100 Net fixed assets 33,000 Long-term debt 9,300 Equity 36,600 Total $51,000 Total $51,000 James, Inc.

Current assets $3,500 Current liabilities $2,100 Net fixed assets 8,900 Long-term debt 1,400 Equity 8,900 Total $12,400 Total $12,400