Tongue Company has merged into Groove Pharmacies, Inc., where 1.5 shares of Groove were exchanged for...
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Tongue Company has merged into Groove Pharmacies, Inc., where 1.5 shares of Groove were exchanged for each share of Tongue. The balance sheets of the two companies before the merger were as follows (in millions): Current assets Fixed assets Goodwill Total Current liabilities Long-term debt Shareholders' equity Total Number of shares (in millions) Market value per share TONGUE $5 7 $12 $12 0.2 $35 GROOVE $20 30 । $52 $9 15 28 $52 1.4 $28 The fair market value of Tongue's fixed assets is $400,000 higher than their book value. Construct the balance sheet for the company after the merger, using the purchase method of accounting. Tongue Company has merged into Groove Pharmacies, Inc., where 1.5 shares of Groove were exchanged for each share of Tongue. The balance sheets of the two companies before the merger were as follows (in millions): Current assets Fixed assets Goodwill Total Current liabilities Long-term debt Shareholders' equity Total Number of shares (in millions) Market value per share TONGUE $5 7 $12 $12 0.2 $35 GROOVE $20 30 । $52 $9 15 28 $52 1.4 $28 The fair market value of Tongue's fixed assets is $400,000 higher than their book value. Construct the balance sheet for the company after the merger, using the purchase method of accounting.
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Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
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