Silver Enterprises Has Acquired All Gold Mining in a Merger

Silver Enterprises has acquired All Gold Mining in a merger transaction.The following balance sheets represent the premerger book values for both firms. Assume the merger is treated as a purchase for accounting purposes.The market value of All Gold Mining's fixed assets is $3,800; the market values for current and other assets are the same as the book values.Assume that Silver Enterprises issues $5,000 in new long-term debt to finance the acquisition.The post-merger balance sheet will reflect goodwill of _____ and total equity of _____.

A) $640; $2,700
B) $640; $4,610
C) $890; $2,700
D) $890; $4,610
E) $890; $5,500

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