Question 2 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 Book Value € 35,000 Fair Value € 35,000 Assets Book Value Cash & receivables € 250,000 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 € 580,000 € 210,000 € 245,700 Total Liabilities and Stockholders' Equity Accounts Payable € 72,000 € 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. . b. What would the balance of inventory be in the balanced sheet of combined company immediately after the combination? c. What would the balance of accounts payable be in the balanced sheet of combined company immediately after the combination?!: d. What would the balance of common stock be in the balanced sheet of combined company immediately after the combination?
Question 2 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 Book Value € 35,000 Fair Value € 35,000 Assets Book Value Cash & receivables € 250,000 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 € 580,000 € 210,000 € 245,700 Total Liabilities and Stockholders' Equity Accounts Payable € 72,000 € 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. . b. What would the balance of inventory be in the balanced sheet of combined company immediately after the combination? c. What would the balance of accounts payable be in the balanced sheet of combined company immediately after the combination?!: d. What would the balance of common stock be in the balanced sheet of combined company immediately after the combination?
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Transcribed Image Text:Question 2
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
Book Value
€ 250,000
Surprise
Book Value
€ 35,000
Fair Value
€ 35,000
Assets
Cash & receivables
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
C 210,000
€ 245,700
Liabilities and Stockholders' Equity
Accounts Payable
€ 72,000
€ 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. v.
b. What would the balance of inventory be in the balanced sheet of combined company immediately after
the combination?
c. What would the balance of accounts payable be in the balanced sheet of combined company immediately
after the combination?!:
d. What would the balance of common stock be in the balanced sheet of combined company immediately
after the combinationan
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