Please show all your work, and explain calculations.

THank you

Acquiring Company buys 100% of target Companys equity for $5million in cash. As an analyst, you are given the premerger balance sheets for the 2 companies below.

1. Assuming plant and equipment are revalued upward by $500,000, what will be the combined companies shareholders equity plus total liabilities?

2. What is the difference between Acquiring Companys shareholders equity and the shareholders equity of the combined companies?

Pre-merger balance sheets for above companies

	Acquiring Company	Target Compaany
Current Assets	600,000	800,000
Plant & Equipment	1,200,000	1,500,000
Total Assets	1,800,000	2,300,000
Long Term Debt	500,000	300,000
Shareholder's Equity	1,300,000	2,000,000
Shareholder Equity +
Total Liabilities	1,800,000	2,300,000