Consider the following premerger information about Firm X and Firm Y:222Total earningsSharesoutstandingPer-share values:MarketBookFirm X$92,00049,000Assets from XAssets from YGoodwillTotal Assets XYLA GAFirm Y$20,50014,00049 $18 $207zursurchofMwww.amentrat human pagrawe anakmuom2Hoe oAssume that Firm X acquires Firm Y by paying cash for all the shares outstanding at amerger premium of $7 per share, and that neither firm has any debt before or after themerger. Construct the postmerger balance sheet for Firm X assuming the use of thepurchase accounting method. (Do not round intermediate calculations and round youranswers to the nearest whole number, e.g., 32.)

In merger assets of the company are combined to form one company and create value for company.

Consider the following premerger information about Firm X and Firm Y: Total earnings Shares outstanding Per-share values: Market Book Firm X Firm Y $92,000 $20,500 49,000 14,000 LA LA $ 49 $ 18 $ 20 7

Consider the following premerger information about Firm X and Firm Y: Total earnings Shares outstanding Per-share values: Market Book Firm X Firm Y $92,000 $20,500 49,000 14,000 LA LA $ 49 $ 18 $ 20 7

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 10MC: When treasury stock accounted for by the cost method is subsequently sold for more than its purchase...

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Question

Consider the following premerger information about Firm X and Firm Y:
222
Total earnings
Shares
outstanding
Per-share values:
Market
Book
Firm X
$92,000
49,000
Assets from X
Assets from Y
Goodwill
Total Assets XY
LA GA
Firm Y
$20,500
14,000
49 $
18 $
20
7
zursurch
of
M
www.am
entrat human pa
grawe anakmuom
2
Hoe o
Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a
merger premium of $7 per share, and that neither firm has any debt before or after the
merger. Construct the postmerger balance sheet for Firm X assuming the use of the
purchase accounting method. (Do not round intermediate calculations and round your
answers to the nearest whole number, e.g., 32.)

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