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Assume that the following balance sheets are stated at book value. $ 6,800 Current assets Net fixed assets Meat Co. $ 15,000 Current liabilities 40,500
Assume that the following balance sheets are stated at book value. $ 6,800 Current assets Net fixed assets Meat Co. $ 15,000 Current liabilities 40,500 Long-term debt Equity 11,300 37,400 Total $55,500 Total $55,500 $2,800 Current assets Net fixed assets Loaf, Inc. Current $ 4,900 liabilities 12,400 Long-term Equity debt 3,400 11,100 Total $ 17,300 Total $17,300 Suppose the fair market value of Loaf's fixed assets is $18,300 versus the $12,400 book value shown. Meat pays $25,000 for Loaf and raises the needed funds through an issue of long-term debt Construct the postmerger balance sheet under the purchase accounting method. Current assets Fixed assets Goodwill Total Meat Co., post-merger Current liabilities Long-term debt Equity Total
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