the existing password hashes are stored in
To create a user account with the same password as listed there, just provide the password hash:
sudo useradd happy -p '$1$xxxxxxxx$xxxxxxxxxxxxxxxxxxxxxx' -s /bin/bash -m
The entire contents of the home directory could also be copied to bring application settings forward as well. Be sure to make sure that the copied files end up owned by the user they were copied for, the user ids will not necessarily be the same.