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    Basic Forms of Acquisitions- Merger. Construct a balance sheet for a new corporation if the merger is treated as a purchase for accounting purposes.

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    Vertical Merger-
    Company 1 has issued $300,000 in new long-term debt to pay for its purchase (300,000 is the purchase price). Construct a balance sheet for a new corporation if the merger is treated as a purchase for accounting purposes. The balance sheets shown here represent the assets of both firms at their market value. Assume these market values are also the book values.

    Company 1

    Current assets $400 Current liabilities $200
    Other assets 100 Long-term debt 100
    Net fixed assets 500 Equity 700
    Total $1,000 Total $1,000

    Company 2

    Current assets $80 Current liabilities $80
    Other assets 40 Equity 120
    Net Fixed assets 80
    Total $200 Total $200

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    https://brainmass.com/business/mergers-and-acquisitions/86768

    Solution Summary

    Computations are shown in excel for you. No references.

    $2.19

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