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Question 2 (50 points). On January 1, 2021, Party Corporation acquired Surprise Corporation's net assets by paying 215,000 cash. Balance sheet data for the Party

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Question 2 (50 points). On January 1, 2021, Party Corporation acquired Surprise Corporation's net assets by paying 215,000 cash. Balance sheet data for the Party & Surprise and fair value information for Surprise immediately before the business combination are given below: Party Book Value 250,000 100,000 75,000 250,000 -95,000 580,000 Surprise Book Value 55,000 45,000 50,000 136,000 -48,000 238,000 Fair Value 55,000 47,500 55,000 120,000 277,500 Assets Cash & receivables Inventory Land Plant, Property and Equipment Less: Accumulated Depreciation Total Liabilities and Stockholders' Equity Accounts Payable Notes Payable Bonds payable Common Stock Additional Paid-in Capital Retained Earnings Total 72,000 37,500 26,000 35,000 125,000 100,000 60,000 125,000 98,000 580,000 35,000 26,000 35,000 40,000 50,000 52,000 238,000 Required: a. Prepare the journal entry to record the acquisition of Surprise Corporation. (35 points). b. What would the balance of inventory be in the balanced sheet of combined company immediately after the combination? (5 points). c. What would the balance of accounts payable be in the balanced sheet of combined company immediately after the combination? (5 points). d. What would the balance of retained earnings be in the balanced sheet of combined company immediately after the combination? (5 points)

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