Acquiring Company buys 100% of Target Company's equity for $5,000,000 in cash. As an analyst, you are given the
following pre-merger balance sheets for the two companies. Assuming plant and equipment is revalued upward by $500,000,
what will be the combined companies' shareholders' equity plus total liabilities? What is the difference between Acquiring
Company's shareholders' equity and the shareholders' equity of the combined companies? Show your work.

\begin{array}{c}\text { Balance Sheets (Dollars) }\\\begin{array} { | l | c | c | } \hline & \text { Acquiring Company } & \text { Target Company } \\\hline \text { CurrentAssets } & 600,000 & 800,000 \\\hline \text { Plant and Equigment } & 1,200,000 & 1,500,000 \\\hline \text { Tatal Assets } & 1,800,000 & 2,300,000 \\\hline \text { Long-Tem Debt } & 500,000 & 300,000 \\\hline \text { Sharehalder's' Equity } & 1,300,000 & 2,000,000 \\\hline \text { Shareholder' Equity + Total } & 1,800,000 & 2.300,000 \\\text { Limbilities } & & \\\hline\end{array}\end{array}

The Convertible Debt Is Described as a "Stock Lockup

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