Question
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 88,000 $ 18,500 Shares outstanding 45,000 20,000
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 88,000 $ 18,500 Shares outstanding 45,000 20,000 Per-share values: Market $ 45 $ 16 Book $ 16 $ 7 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $5 per share, and 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. (Do not round intermediate calculations.)
Assets from X $
Assets from Y
Goodwill
Total Assets XY $
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