The Balance Sheet of Meat Co

question 57

Multiple Choice

The balance sheet of Meat Co. reflects current assets of $6,000, net fixed assets of $8,400, current liabilities of $1,800, long-term debt of $1,100, and equity of $11,500. The balance sheet of Loaf Inc. shows current assets of $2,000, net fixed assets of $3,300, current liabilities of $900, long-term debt of $500, and equity of $3,900. Suppose the fair market value of Loaf's fixed assets is $4,100 versus the $3,300 book value shown. Meat pays $5,200 for Loaf and raises the needed funds through an issue of long-term debt. Assume the purchase method of accounting is used. The post-merger balance sheet of Meat Co. will have total debt of ________ and total equity of ________.

• A) $1,600; $11,500
• B) $1,600; $15,400
• C) $10,200; $15,400
• D) $9,500; $11,500
• E) $14,500; $15,400

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Definitions:

Abducens Nerves

Cranial nerves (VI) responsible for controlling the lateral rectus muscle of the eye, which facilitates outward movement.

Eye Movement

The voluntary or involuntary movement of the eyes, which can be essential for visual tracking and focusing.

Dilate Blood Vessels

The process of widening or expanding the lumens of blood vessels, often to increase blood flow to certain areas of the body.

Glossopharyngeal Nerves

Cranial nerves IX that innervate the tongue and pharynx, playing key roles in taste, swallowing, and salivation.