Additional Time Used: 07 minutes, 17 seconds. Question Completion Status: Attach File Browse My Computer Browse Content Collection QUESTION 4 Sully Company's January 1, 2020 balance sheet is as follows: Assets Liabilities & Equity Cash, receivables $ 3,000,000 Current liabilities $ 2,000,000 Inventories 4,000,000 Long-term liabilities Equity method investments 1,000,000 Capital stock 6,500,000 2,000,000 Land, buildings & equipment 5,500,000 Retained earnings 3,500,000 Accumulated other comprehensive loss 400,000) Treasury stock (100,000) Total assets $13,500,000 Total liabilities & equity $ 13,500,900 On January 1, 2020, Pronto Corporation acquired Sully's assets and liabilities for $10 million in cash. $ 35 million(market value) in stock (100,000 shares whose par value was $ 10 per share) and a earnout liability of $ 5 million . Attorney and bankers' fees were $ 500,000, while stock registration fees were $ 400,000. Sully's cash and receivables, and current liabilities were reported at values approximationg fair value. However, its inventories were overvalued by $2,000,000, and its equity method investments were undervalued by $3,000,000. Its land, buildings & equipment were overvalued by $2,500,000, and its long-term liabilities were undervalued by $500,000. The accountants identified the following possible intangible assets attributed to Sully but not currently recorded on its balance sheet: Fair Value Skilled workforce $7,000,000 Favorable leases 5,000,000 Developed technology 2,000,000 Prospective customer contracts 1,500,000 Synergies on future projects 3,000,000 Required: a. Provide the journal entry Pronto makes to record the merger. b. If Pronto had acquired 100% of the stock of Sully, how would your journal entry change? Attach File Browse My Computer Browse Content Collection Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All 99- 1 7 9 19 [M