1- Balance Sheets for Mergers. Consider the following premerger information about Firm X and Firm Y:

Assume that Firm X acquires Firm Y by issuing new long-term 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 postmerger balance sheet for Firm X under the purchase accounting method.

Firm X Firm Y Total earnings $85,000 $11,000 Shares outstanding 30,000 8,000 Per-share values: Market $ 58 $ 13 Book $ $ 6 $ 2