Assume that the following balance sheets are stated at book value. Suppose that Meat Co. purchases Loaf, Inc. 

The fair market value of Loaf’s fixed assets is $9,800 versus the $6,900 book value shown. Meat pays $17,800 for Loaf and raises the needed funds through an issue of long-term debt. Construct the postmerger balance sheet under the purchase accounting method.

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Meat Co. Current liabilities Current assets Net fixed assets $ 6,100 $18,000 Long-term debt Equity Total 43,000 13,700 41,200 Total $61,000 $61,000 Loaf, Inc $ 3,900 Current liabilities Current assets $ 1,500 Net fixed assets Long-term debt 6,900 2,600 Equity Total 6,700 Total $10,800 $10,800