Question: Silver Enterprises has acquired All Gold Mining in a merger
Silver Enterprises has acquired All Gold Mining in a merger transaction. Construct the balance sheet for the new corporation if the merger is treated as a purchase for accounting purposes. The market value of All Gold Mining’s fixed assets is $5,800; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $13,800 in new long-term debt to finance the acquisition. The following balance sheets represent the premerger book values for bothfirms:
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