QUESTIONS Question 1 (50 points). Flower Company was established on January 1, 2017. Along with other assets, it immediately purchased land for $200,000, and a building $150,000. On January 1, 2021, Flower transferred these assets, cash of $30,000, and inventory costing $50,000 to a newly created subsidiary. Sparrow Company, in exchange for 40.000 shares of Sparrow's $5 par value stock Flower uses straight line depreciation and useful life of 30 years for the building with no estimated residual values. Required: a. Give the journal entry that Flower recorded for the transfer of assets and liabilities to Sparrow (25 points). D. Give the journal entry that Sparrow recorded for the receipt of assets and liabilities from Flower (25 points). Question 2 (50 points). On January 1, 2021, Party Corporation acquired Surprise Corporation's net assets by paying 175,000 cash. Balance sheet data for the Party & Surprise and fair value information for Surprise immediately before the business combination are given below: Party Surprise Assets Book Value Book Value Fair Value Cash & receivables 250,000 35,000 35.000 Inventory 100,000 58,300 65,000 Land 75,000 33,500 35,700 Plant, Property and Equipment 250.000 120,000 110,000 Less: Accumulated Depreciation -95,000 -36,800 Total 580,000 210,000 245,700 Labilities and Stockholders' Equity Accounts Payable 72.000 C 35,000 37,500 Notes Payable 125,000 13,000 13,000 Bonds payable 100.000 35,000 35.000 Common Stock 60,000 30,000 Additional Paid-in Capital 125,000 45,000 Retained Earnings 98,000 52,000 Total 580,000 (210,000 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). 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 common stock be in the balance sheet of combined company immediately after the combination? (5 points)