Incorporating goodwill


In the previous problem (3- Balance Sheets for Mergers), suppose the fair market value of James's fixed assets is $12,000 versus the $7,100 book value shown. Jurion pays $17,000 for James and raises the needed funds through an issue of long-term debt. Construct the post merger balance sheet now, assuming that the purchase method of accounting is used.

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Finance Basics: Incorporating goodwill
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