In the previous problem, construct the statement of financial position for the new corporation assuming that the transaction is treated as a purchase for accounting purposes. The market value of Leamington’s fixed assets is $8,700; the market values for current and other assets are the same as the book values. Assume that Knapps Enterprises issues $13,000 in new long-term debt to finance the acquisition.

Data from previous problem

Knapps Enterprises has acquired Leamington Corp. in a merger transaction. Construct the statement of financial positionfor the new corporation if the merger is treated as a pooling of interests for accounting purposes. The following statements of financial position represent the pre-merger book values for both firms:

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Knapps Enterprises $ 2,800 $ 4,800 Current liabilities Current assets Long-term debt Equity Other assets 1,200 7,500 Net fixed assets 15,300 11,000 Total $21,300 Total $21,300 Leamington Corp. $1,300 Current liabilities $1,350 Current assets Long-term debt Equity Other assets 510 Net fixed assets 6,800 7,260 Total Total $8,610 $8,610