5. Financial reporting for mergers The Financial Accounting Standards Board (FASB) eliminated the use of pooling-of interests method for the accounting of mergers occurring after July 1, 2001. Since then, all mergers have been handled using purchase accounting Consider the following case: Company A buys Company 8 for $30. The value of Company B's equity (total assets minus its total liabilities) is $50. Which of the following statements best describes the merger's effect on the merged company's consolidated balance sheet? O Company B's abilities will be deducted from Company A's liabilities in the consolidated balance sheet. O On the consolidated balance sheet, the value of Company B's assets will be written down (recorded) on Company A's books at a value lower than was recorded on Company B's books On the consolidated balance sheet, Company B's common stock value will be written down (recorded) on Company A's books at a value lower than was recorded on Company B's books Two weeks ago. National Enterprises Inc. ONE) and Sanger Machine Company agreed to a merger in which National will purchase Sanger using a stock for-stock transaction. Nationals latest evaluation of the deal expects no synergistic benefits from the merger and has noted that its common stock is currently priced at $80.00 per share: Sanger's shares are trading for $48.00 per share. National has offered a 20% premium over the current price for Sanger's shares Acconding to the terms of the purchase, the transaction's exchange ratia, which indicates the number of National shares that each Sanger shareholder will receive for each share sold, will be w Given this information and that which follows, complete the table regarding the National-Sanger merger National