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Sigma Corp acquires Theta Ltd for $75 million. The balance sheets prior to the merger are: Balance Sheet (in millions) Sigma Theta Current assets $90
Sigma Corp acquires Theta Ltd for $75 million. The balance sheets prior to the merger are:
Balance Sheet (in millions) | Sigma | Theta |
Current assets | $90 | $18 |
Property and equipment | $600 | $130 |
Intangibles | $40 | $6 |
Total assets | $730 | $154 |
Current liabilities | $35 | $4 |
Long-term debt | $500 | $80 |
Capital stock | $60 | $20 |
Retained earnings | $135 | $50 |
Accumulated other comp. inc. | $(15) | $0 |
Total liabilities and equity | $730 | $154 |
Theta’s equipment is undervalued by $25 million, and it has unreported intangibles valued at $8 million.
Required: Prepare Sigma’s balance sheet immediately following the merger.
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