Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The balance sheets of Wolf, Inc. and Target, Inc. appear below. Wolf, Inc. Target, Inc. Current Assets Fixed Assets Total Assets 1,000,000 2,500,000 3,500,000 400,000

image text in transcribed
The balance sheets of Wolf, Inc. and Target, Inc. appear below. Wolf, Inc. Target, Inc. Current Assets Fixed Assets Total Assets 1,000,000 2,500,000 3,500,000 400,000 800,000 1,200,000 Current Liability Long term debt Equity Total L & E 1,000,000 1,000,000 1,500,000 3,500,000 400,000 400,000 400,000 1,200,000 Shares Outstanding 30,000 20,000 The shares of Wolf are selling for $50 per share and the shares of Target are selling for $20 per share. Wolf will acquire Target by issuing one new shares of Wolf for each two shares of Target. Suppose the fixed assets of Target are found to be $50,000 greater than the book value. Please answer the following questions about the balance sheet of the combined company as it would appear after the merger. a. How much is the total assets for the combined company after the merger? b. How much is the goodwill after the merger? C. How much is the total equity after the merger

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

Managerial Accounting Creating Value in a Dynamic Business Environment

Authors: Ronald Hilton, David Platt

10th edition

78025664, 978-0078025662

More Books

Students also viewed these Accounting questions