Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms: ' Silver

Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms: '

Silver Enterprises

Current assets $ 6,000 Current liabilities $ 4,000

Other assets 2,400 Long-term debt 8,700

Net fixed assets 27,300 Equity 23,000

Total $ 35,700 Total $ 35,700

All Gold Mining

Current assets $ 2,500 Current liabilities $ 1,590

Other assets 750 Long-term debt 0

Net fixed assets 11,600 Equity 13,260

Total $ 14,850 Total $ 14,850

Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase for accounting purposes. The market value of All Gold Mining's fixed assets is $12,850; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $19,000 in new long-term dept to finance the acquisition.

Silver Enterprises, post-merger
Current assets $ Current liabilities $
Other assets Long-term debt
Net fixed assets Equity
Goodwill
Total $ Total $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

EDI Security Control And Audit

Authors: Albert J. Marcella Jr, Sally Chan, John Merriam

1st Edition

0890066108, 978-0890066102

More Books

Students also viewed these Accounting questions

Question

What is the environment we are trying to create?

Answered: 1 week ago

Question

How can we visually describe our goals?

Answered: 1 week ago