Assume the Following Balance Sheets Are Stated at Book Value

Multiple Choice

Assume the following balance sheets are stated at book value. Suppose the fair market value of Loaf's fixed assets is $7,200 versus the $3,300 book value shown.Meat pays $10,200 for Loaf and raises the needed funds through an issue of long-term debt.Assume the purchase method of accounting is used.The post-merger balance sheet of Meat Co.will have total debt of ______ and total equity of ______.

A) $1,600; $11,500
B) $1,600; $15,400
C) $10,200; $15,400
D) $14,500; $11,500
E) $14,500; $15,400