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): TONGUE GROOVE Current assets $ 5 $20 Fixed assets 7 30 Goodwill – 2 Total $12 $52 Current liabilities $ 3 $ 9 Long-term debt 2 15 Shareholders’ equity 7 28 Total $12 $52 Number of shares (in millions) 0.2 1.4 Market value per share $35 $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...

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):

	TONGUE	GROOVE
Current assets	$ 5	$20
Fixed assets	7	30
Goodwill	–	2
Total	$12	$52
Current liabilities	$ 3	$ 9
Long-term debt	2	15
Shareholders’ equity	7	28
Total	$12	$52
Number of shares (in millions)	0.2	1.4
Market value per share	$35	$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.

May 26, 2022

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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...

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