Alberta Corp.,with a book value of $40 million and a market value of $45 million,has merged with Ontario Corp.,with a book value of $26 million and a market value of $28 million at a price of $30 million.Under the purchase method,what will be the total assets on the book of the new merged firm?
A)$70 million
B)$66 million
C)$88 million
D)$89 million

Question

Quizplus · Accepted Answer

The total assets on the book of the new merged firm will be $66 million. This is because the book value of Alberta Corp. is $40 million and the book value of Ontario Corp. is $26 million, for a total of $66 million.