Balance Sheets for Mergers:

Silver Enterprises has acquired All Gold Mining in a merger transaction. Construct the balance sheet for the new corporation if the merger is treated as a purchase of interests for accounting purposes. The following balance sheets represents the premerger book values for both firms.

Silver Enterprises

Current assets                    $ 5,300                  Current liabilities                   $ 3,100

Other assets                          1,500                  Long-term debt                         7,800

Net fixed assets                  17,900                  Equity                                      13,800

Total                                  $24,700                  Total                                      $24,700

All Gold Mining

Current assets                    $ 1,400                  Current liabilities                   $ 1,460

Other assets                             570                  Long-term debt                                0

Net fixed assets                    7,400                  Equity                                         7,910

Total                                  $ 9,370                  Total                                      $   9,370

The market value of All Gold Mining’s fixed assets is $9,100; the market value for current and other assets are the same as the book values. Assume that Silver Enterprises issues $15,000 in new long-term debt to finance the acquisition.