Presented below are the book values and fair values of the assets and liabilities of A, Inc. and B Inc. on Dec 4, 2016, immediately prior to a business combination. The Company is evaluating where A should be the acquirer or if B should be the acquirer.

	Axtel, Inc		Barcel, Inc.
	Book value	Fair value	Book value	Fair value
Current assets	$ 40,000	$ 100,000	$ 50,000	$ 25,000
PP&E	$ 200,000	$ 400,000	$ 150,000	$ 175,000
Current liabilities	$ 70,000	$ 70,000	$ 30,000	$ 30,000
Common stock	$ 80,000		$ 60,000
Retained earnings	$ 90,000		$ 110,000

Previously unreported identifiable intangibles, capitalized per GAAP are:

A, Inc. $25,000

B, Inc. $20,000

Prepare an accounting memo to address the below issues.

What does the balance sheet of the acquiring firm following each of the following business combinations

A borrows $250,000 on a long-term basis and buys full ownership of B for $250,000 cash. The transaction is recorded as a merger.