Assume that the following statements of financial position arestated and a book value. Construct...

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Accounting

Assume that the following statements of financial position arestated and a book value. Construct a post-merger statement offinancial position assuming that Amherst Co. purchases Essex Inc.and the pooling of interests method of accounting is used.
Amherst co. EssexINC.
Current Assets $12,000 Current Assests 3400
Net fixed Asstes 36,000 Net fixed assests 6,400
Total = 48,000 Total 9,800
Current liabilitoes $5,300 Current liab 1,300
long term debt 9,800 long term debt 1,900
equity 32,900 equity 6,600
total = 48,000 total = 9,800

Answer & Explanation Solved by verified expert

3.8 Ratings (675 Votes)

Under pooling method, all the accounts of both companies are combined together and accounts are total in the new company after post merger

Current assets = (12000+ 3400) = 15400

Net Fixed assets = (36000+6400) = 42400

Current Liabilities = (5300+1300) = 6600

Long Term Debt = (9800+1900) = 11700

Equity = (32900+6600) = 39500

Amherst Co, post merger

Liabilities Assets

Equity $ 39500 Current assets $ 15400

Long term Liability $ 11700 Net Fixed assets $ 42400

Current Liability $ 6600

Total Liabilities $ 57800 Total assets $ 57800

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In: AccountingAssume that the following statements of financial position arestated and a book value. Construct a...Assume that the following statements of financial position arestated and a book value. Construct a post-merger statement offinancial position assuming that Amherst Co. purchases Essex Inc.and the pooling of interests method of accounting is used.Amherst co. EssexINC.Current Assets $12,000 Current Assests 3400Net fixed Asstes 36,000 Net fixed assests 6,400Total = 48,000 Total 9,800Current liabilitoes $5,300 Current liab 1,300long term debt 9,800 long term debt 1,900equity 32,900 equity 6,600total = 48,000 total = 9,800