Assume that the following balance sheets are stated at book value. Suppose the fair market value...

 

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Assume that the following balance sheets are stated at book value. Suppose the fair market value of acquired firm's fixed assets is $12,000 versus the book value shown. The acquiring firm pays $20,000 for the acquired firm and raises the needed funds through an issue of long-term debt. Assume that the purchase method of accounting is used. Current assets Net fixed assets Total Current assets Net fixed. assets $5,000 25,000 Acquiring Firm $30,000 $3,000 7,000 Current liabilities Long-term debt Equity Total Acquired Firm Current liabilities Long-term debt Equity Total $4,000 6,000 20,000 $30,000 $2,000 5,000 3,000 $10,000 Total $10,000 What is the value of long-term debt that should be shown on the post-merger balance sheet? Enter your answer in the box shown below as dollars with 2 digits to the right of the decimal point. Assume that the following balance sheets are stated at book value. Suppose the fair market value of acquired firm's fixed assets is $12,000 versus the book value shown. The acquiring firm pays $20,000 for the acquired firm and raises the needed funds through an issue of long-term debt. Assume that the purchase method of accounting is used. Current assets Net fixed assets Total Current assets Net fixed. assets $5,000 25,000 Acquiring Firm $30,000 $3,000 7,000 Current liabilities Long-term debt Equity Total Acquired Firm Current liabilities Long-term debt Equity Total $4,000 6,000 20,000 $30,000 $2,000 5,000 3,000 $10,000 Total $10,000 What is the value of long-term debt that should be shown on the post-merger balance sheet? Enter your answer in the box shown below as dollars with 2 digits to the right of the decimal point.

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Heres how to find the longterm debt on the postmerger balance sheet Calculate the book value of the ... View the full answer