The financial statements for Jobe Inc. and Lake Corp., just prior to their combination, for the year
Question:
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, Jones issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Blake. Jones' shares had a fair value on that date of $35 per share. Jones paid $34,000 to an investment bank for assisting in the arrangements. Jones also paid $24,000 in stock issuance costs to effect the acquisition of Blake.Blake will retain its incorporation.
Determine consolidated additional paid-in capital at December 31, 20x2
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