Question
Assume that the following balance sheets are stated at book value. The fair market value of James' fixed assets is equal to $11,200. Jurion pays
Assume that the following balance sheets are stated at book value. The fair market value of James' fixed assets is equal to $11,200. Jurion pays $18,280 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 | $ | 13,425 | Current liabilities | $ | 6,060 | ||
| Net fixed assets | 38,850 | Long-term debt | 10,750 | ||||
| Equity | 35,465 | ||||||
| Total | $ | 52,275 | Total | $ | 52,275 | ||
| James, Inc. | |||||||
| Current assets | $ | 3,970 | Current liabilities | $ | 2,060 | ||
| Net fixed assets | 7,920 | Long-term debt | 2,470 | ||||
| Equity | 7,360 | ||||||
| Total | $ | 11,890 | Total | $ | 11,890 | ||
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Sawyer's Internal Auditing The Practice Of Modern Internal Auditing
Authors: Lawrence Sawyer, Mortimer Dittenhofer, James Scheiner
5th Edition
0894131788, 978-0894131783
