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 $ 5,100 Current liabilities $ 3,100 Other assets 1,500 Long-term debt 7,800 Net fixed assets 18,300 Equity 14,000 Total $ 24,900 Total $ 24,900 All Gold Mining Current assets $ 1,600 Current liabilities $ 1,410 Other assets 570 Long-term debt 0 Net fixed assets 8,000 Equity 8,760 Total $ 10,170 Total $ 10,170 Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase of interests for accounting purposes. The market value of All Gold Mining's fixed assets is $9,250; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,500 in new long-term debt to finance the acquisition. Current assets Current Liabilities Other assets Long-term debt Net fixed assets Equity Goodwill Total Total
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 $ 5,100 Current liabilities $ 3,100 Other assets 1,500 Long-term debt 7,800 Net fixed assets 18,300 Equity 14,000 Total $ 24,900 Total $ 24,900 All Gold Mining Current assets $ 1,600 Current liabilities $ 1,410 Other assets 570 Long-term debt 0 Net fixed assets 8,000 Equity 8,760 Total $ 10,170 Total $ 10,170 Construct the balance sheet for the new corporation assuming that the transaction is treated as a purchase of interests for accounting purposes. The market value of All Gold Mining's fixed assets is $9,250; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,500 in new long-term debt to finance the acquisition. Current assets Current Liabilities Other assets Long-term debt Net fixed assets Equity Goodwill Total Total
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 2DIC
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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 | $ 5,100 | Current liabilities | $ 3,100 |
| Other assets | 1,500 | Long-term debt | 7,800 |
| Net fixed assets | 18,300 | Equity | 14,000 |
| Total | $ 24,900 | Total | $ 24,900 |
| All Gold Mining | |||
| Current assets | $ 1,600 | Current liabilities | $ 1,410 |
| Other assets | 570 | Long-term debt | 0 |
| Net fixed assets | 8,000 | Equity | 8,760 |
| Total | $ 10,170 | Total | $ 10,170 |
|
Construct the |
| Current assets | Current Liabilities | ||
| Other assets | Long-term debt | ||
| Net fixed assets | Equity | ||
| Total | Total |
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