Wilson Corporation acquires Greatbatch Company for $50 million cash in a merger.
The balance sheets of both companies at the date of acquisition are as follows:
Balance Sheet (in millions) Wilson Greatbatch
Current assets $60 $5
Property and equipment 500 90
Intangibles 20 3
Total assets $580 $98
Current liabilities $25 $2
Long-term debt 400 65
Capital stock 50 12
Retained earnings 120 15
Accumulated other-
comprehensive income (loss) (15) 4
Total liabilities and equity $580 $98
Greatbatch's property and equipment is overvalued by $30 million, its reported intangibles are undervalued by $20 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $7 million.
Required:
Prepare Wilson's balance sheet immediately following the merger.
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