Balance Sheets for Mergers

Consider the following premerger information about firm X and firm Y: FirmX FirmY Total earnings $105,000 $48,300 Shares outstanding $43,900 $33,000

Per-share values:

Market. $53 $19 Book $21. $9

> Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $5 per share. Assuming that neither firm has any debt before or after the merger, construct the postmerger balance sheet for Firm X assuming the use of the purchase accounting method.