2:58:23 Q 26. (7 marks) ME Chansey Manufacturing Company decided to purchase Magikarp Company. The balance sheet of Magikarp Company as of December 31, 2020 was as follows: Cash Receivables Inventory Plant assets (net) $210,000 450,000 275,000 1,025,000 Accounts payable Common shares Retained earnings $325,000 800,000 835.000 Total assets $1,960,000 Total liabilities and equity $1.960,000 An appraisal, agreed to by the parties, indicated that the fair market value of the inventory was $320,000 and that the fair market value of the plant assets was $1,225,000. The fair market value of the receivables is equal to the amount reported on the balance sheet. Instructions: (a) If the purchase price was $2.5 million all paid in cash, record the acquisition. (b) If the purchase price was instead $1.8 million all paid in cash, how would your answer to part a change