Bigge Stores, Inc. (BSI), has acquired the L. Grande Company (LGC) for $4 million in stock and

Question:

Bigge Stores, Inc. (BSI), has acquired the L. Grande Company (LGC) for $4 million in stock and the assumption of $2 million in LGC liabilities. The balance sheets of the two companies before the merger revealed the following information (in millions):

Determine the balance sheet of the combined company after the merger under the pur¬chase method of accounting. (Assume that the net book value of LGC assets represents their fair market value.)

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...