Question
Balance Sheet after Business Acquisition Wilson Corporation acquires Greatbatch Company for $60 million cash in a merger. The balance sheets of both companies at the
Balance Sheet after Business Acquisition
Wilson Corporation acquires Greatbatch Company for $60 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows:
Balance Sheet(in millions)WilsonGreatbatchCurrent assets$ 60$ 5Property and equipment50090Intangibles203Total assets$580$98Current liabilities$ 25$ 2Long-term debt40065Capital stock5012Retained earnings12015Accumulated other comprehensive income (loss)(15)4Total liabilities and equity$580$ 98
Greatbatch's property and equipment is overvalued by $35 million, its reported intangibles are undervalued by $15 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $10 million.
Required
Prepare Wilson's balance sheet immediately following the merger.
Use a negative sign with your answer for AOCI if the balance is a loss.
Wilson Corporation Balance Sheet(in millions) Assets Liabilities Current assetsAnswer
Current liabilities
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Property and equipment
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Long-term debt
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Intangibles
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Total liabilities
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Goodwill
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Equity Capital stock
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Retained earnings
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AOCI
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Total equity
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Total assets
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Total liabilities and equity
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