Question
Knapps Enterprises has acquired Leamington Corp. in a merger transaction. Construct the statement of financial position for the new corporation if the merger is treates
Knapps Enterprises has acquired Leamington Corp. in a merger transaction. Construct the statement of financial position for the new corporation if the merger is treates as a purchase for accounting purposes. The market value of Leamington's fixed assets is $9,100; the market values for the current and other assets are the same as the book values. Assume the Knapps Enterprises issues $15,000 in long-term debt to finance the acquisition.
Knapps enterprises
Current assets $5,300
Other assets 1,500
Net fixed assets 17,900
Total $24,700
Current liabilities $3,100
Long-term debt 7,800
Equity 13,800
total 24,700
Leamington Corp.
Current assets $1,400
Other Assets 570
Net fixed assets 7,400
total $9,370
Current Liabilities $1.460
Long-term debt 0
Equity 7,910
Total $9,370
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
