Saturday, August 20, 2011

What information would an accounting worksheet contain after two businesses merge?

For example, If company A was aquired by Company B after you would record the journal entries to show the transaction, then when you go to create a worksheet to show the financial position of the two companies after the acquisition, what type of information would you include on the worksheet??|||One thing would be a type of asset called goodwill. That is the value of the purchase price over the net book value of the assets (or company) that you have purchaed.


You will also have the value of the common equity, which would change as a result of the acquisition.


If you had done an LBO (leveraged buyout), you would include the new liabilities that were used to finance the purchase of the company. Let me know if this helps.

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