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
Answer
Property and equipment
Answer
Long-term debt
Answer
Intangibles
Answer
Total liabilities
Answer
Goodwill
Answer
Equity Capital stock
Answer
Retained earnings
Answer
AOCI
Answer
Total equity
Answer
Total assets
Answer
Total liabilities and equity
Answer
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The Internal Auditing Handbook
Authors: K. H. Spencer Pickett
1st Edition
0471969117, 978-0471969112
