Knapps Enterprises has acquired Leamington Corp. in a merger transaction. The following statements of financial position...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Knapps Enterprises has acquired Leamington Corp. in a merger transaction. The following statements of financial position represent the pre-merger book values for both firms: Knapps Enterprises Current assets $ 5,300 Current liabilities $ 3,100 Other assets 1,500 Net fixed assets 17,900 Long-term debt Equity 7,800 13,800 Total $24,700 Total $24,700 Leamington Corp. Current assets $1,400 Other assets Net fixed assets Total 570 7,400 $9,370 Current liabilities Long-term debt $1,460 0 Equity Total 7,910 $9,370 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 $9,100; the market values for current and other assets are the same as the book values. Assume that Knapps Enterprises issues $15,000 in new long-term debt to finance the acquisition. (Omit "$" sign in your response.) Current assets Other assets Net fixed assets Goodwill Total Knapps Enterprises, post-merger $ +A Current liabilities Long-term debt Equity Total $ Knapps Enterprises has acquired Leamington Corp. in a merger transaction. The following statements of financial position represent the pre-merger book values for both firms: Knapps Enterprises Current assets $ 5,300 Current liabilities $ 3,100 Other assets 1,500 Net fixed assets 17,900 Long-term debt Equity 7,800 13,800 Total $24,700 Total $24,700 Leamington Corp. Current assets $1,400 Other assets Net fixed assets Total 570 7,400 $9,370 Current liabilities Long-term debt $1,460 0 Equity Total 7,910 $9,370 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 $9,100; the market values for current and other assets are the same as the book values. Assume that Knapps Enterprises issues $15,000 in new long-term debt to finance the acquisition. (Omit "$" sign in your response.) Current assets Other assets Net fixed assets Goodwill Total Knapps Enterprises, post-merger $ +A Current liabilities Long-term debt Equity Total $
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
An employee of Gus's Restaurant sustains a work-related injury. The owner of the restaurant is liable for the injury, however, the employee is not covered under the state's workers' compensation...
-
A small laser emits light at power 5.00mW and wavelength 633 nm. The laser beam is focused (narrowed) until its diameter matches the 1266 nm diameter of a sphere placed in its path. The sphere is...
-
Issue price of \(\$ 10,000\) pays \(3.5 \%\) annually, matures in 5 years. For the bonds with the given properties, find a. the amount paid each year and b. the total amount earned with the bond.
-
Transaction Analysis} During December, Cynthiana Refrigeration Service engaged in the following transactions: a. On December 3, Cynthiana sold a one-year service contract to Cub Foods for \(\$ 12 ;...
-
Amazon.com, Inc.s balance sheet (slightly modified) for December 31, 2011, contained the following items ($ in millions): Property and equipment, net ........... $ 4,417 Accrued expenses and other...
-
Find an equation of the line that satisfies the given conditions. Through (1, 9); parallel to the line x + 2 y = 6
-
Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 200...
-
Down Market Department Stores PLC sell a high proportion of their merchandise on hire purchase (HP). The system for dealing with HP sales is highly organized and well controlled. The HP receivables...
-
You are the manager responsible for prospective new clients and you have visited Bolington Publishing PLC which publishes a small range of fiction paperbacks. The chief executive is Daniel Dunbar and...
-
Harrier Motors deals in motor vehicles, sells spare parts, provides after-sales servicing and undertakes car body repairs. During the financial year to 30 June 2X11, the company expanded its...
-
Polls are to be conducted in two cities to determine the difference in the proportions of residents who believe that the economy will improve over the next year. A 95% confidence interval will be...
-
An unqualified audit report normally states that the financial statements to which the report refers give a true and fair view of the state of the company's affairs at the Statement of Financial...
-
COUNTRY CASE STUDY OF MARKET FAILURE: SIERRA LEONE Market failure is a common phenomenon to all types of economic system, and for which its acuteness is heavily prevalent in developing /...
-
How does health insurance risk differ from other types of insurance risk (e.g., automobile or homeowners insurance)? What is the difference between cost sharing and cost shifting? Is retiree health...
-
Use Figure 12.262 to determine if the given sequence of vertices is a Hamilton path, an Euler trail, both, or neither. 1. Graph \(A, a ightarrow b ightarrow e ightarrow d ightarrow c\) 2. Graph \(F,...
-
Suppose that you lost the combination to a combination lock that consisted of three digits, and each was selected from the digits \(0,1,2,3,4,5,6,7,8\), or 9 . You desperately need to open the lock...
-
Use Graph \(L\) to find a Hamilton path between each pair of vertices or indicate that there isn't one. 1. \(p\) to \(r\) 2. \(m\) to \(p\) 3. o oto \(q\) Graph L S
Study smarter with the SolutionInn App