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.
Current assets $80 Current liabilities $80
Other assets 40 Equity 120
Net Fixed assets 80
Total $200 Total $200
Computations are shown in excel for you. No references.