Question: Look again at Table. Suppose that B Corporations fixed assets are reexamined and found to be worth $12 million instead of $9 million. How would

Look again at Table. Suppose that B Corporation€™s fixed assets are reexamined and found to be worth $12 million instead of $9 million. How would this affect the AB Corporation€™s balance sheet under purchase accounting? How would the value of AB Corporation change? Would your answer depend on whether the merger istaxable?

Balance Sheet of A Corporation Balance Sheet of B Corporation NWC FA 20 80 100 100 NWC FA 30 9 10 10 10 Balance Sheet of AB Corporation NWC FA Goodwill 21 30 118 118

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