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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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