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Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $8 per share. Assuming that neither firm has any debt before or after the merger, construct the postmerger balance sheet for Firm X assuming the use of (a) pooling of interests accounting methods and (b) purchase accounting methods.

Balance Sheets for Mergers Assume that the following balance sheets are stated at book value. Construct a postmerger balance sheet assuming that Sipowicz purchases Sorenson and the pooling of interests method of accounting is used.

Sipowicz Co.

Current assets

$ 8,000 Current liabilities

$ 2,400

Net fixed assets

12,000 Long-term debt

1,600

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