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The financial statements for Jobe Inc. and Lake Corp., just prior to their combination, for the year ending December 31, 20X2, follow. Lake's buildings were

The financial statements for Jobe Inc. and Lake Corp., just prior to their combination, for the year ending December 31, 20X2, follow. Lake's buildings were undervalued on its financial records by $60,000.

Jobe Inc.

Lake Corp.

Revenues

$1,300,000

$500,000

Expenses

(1,180,000)

(290,000)

Net income

$120,000

$210,000

Retained earnings, January 1, 20X2

700,000

500,000

Net income (above)

120,000

210,000

Dividends paid

(110,000)

(110,000)

Retained earnings, December 31, 20X2

$710,000

$600,000

Cash

$160,000

$120,000

Receivables and inventory

240,000

240,000

Buildings (net)

700,000

350,000

Equipment (net)

700,000

600,000

Total assets

$1,800,000

$1,310,000

Liabilities

$250,000

$195,000

Common stock

750,000

430,000

Additional paid-in capital

90,000

85,000

Retained earnings, December 31, 20X2 (above)

710,000

600,000

Total liabilities and stockholders' equity

$1,800,000

$1,310,000

On December 31, 20X2, Jobe issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Lake. Jobe's shares had a fair value on that date of $35 per share. Jobe paid $34,000 to an investment bank for assisting in the arrangements. Jobe also paid $24,000 in stock issuance costs to effect the acquisition of Lake. Lake will retain its incorporation. Required: (1) Prepare the journal entry to record the issuance of common stock by Jobe. (2) Prepare the journal entry to record the payment of combination costs. (3) Determine consolidated net income for the year ended December 31, 20X2. (4) Determine consolidated additional paid-in capital at December 31, 20X2.

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