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Assume that the following balance sheets are stated at book value. Suppose the fair market value of acquired firm's fixed assets is $11,000 versus the
Assume that the following balance sheets are stated at book value. Suppose the fair market value of acquired firm's fixed assets is $11,000 versus the book value shown. The acquiring firm pays $16,000 for the acquired firm and raises the needed funds through an issue of long-term debt. Assume that the purchase method of accounting is used $4,000 Current assets Net fixed assets Acquiring Firm Current $5,000 liabilities 25,000 Long-term debt Equity $30,000 Total 6,000 20,000 $30,000 Total $2,000 Current assets Net fixed assets Acquired Firm Current $3,000 liabilities 7,000 Long-term debt Equity $10,000 Total 5,000 3,000 $10,000 Total What is the value of goodwill that should be shown on the post-merger balance sheet? Enter your answer in the box shown below is dollars with 2 digits to the right of the decimal point VALA
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