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The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the...

The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2017, follow. Lakely's buildings were undervalued on its financial records by $60,000. On December 31, 2017, Jode issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Lakely. Jode's shares had a fair value on that date of $35 per share. Jode paid $34,000 to an investment bank for assisting in the arrangements. Jode also paid $24,000 in stock issuance costs to effect the acquisition of Lakely. Lakely will retain its incorporation. 1. Prepare the journal entries to record: (1) the issuance of stock by Jode; and (2) the payment of the combination costs. The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2017, follow. Lakely's buildings were undervalued on its financial records by $60,000. On December 31, 2017, Jode issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Lakely. Jode's shares had a fair value on that date of $35 per share. Jode paid $34,000 to an investment bank for assisting in the arrangements. Jode also paid $24,000 in stock issuance costs to effect the acquisition of Lakely. Lakely will retain its incorporation. Jode Inc. Lakely corp Revenue $1,300,000 500,000 Expenses 1,180,000 290,000 Net Income 120,000 210,000 Retained earnings, January 1,2017 700,000 500,000 Net income 120,000 210,000 Dividends declared 110,000 110,000 Retained earnings,December 31,2017 710,000 600,000 cash 160,000 120,000 Receivables and inventory' 240,000 240,000 Buildings (net) 700,000 350,000 Equipments(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 , 12/31/2017 710,000 600,000 Total Liabilities and stockholderes equity 1,800,000 1,310,000 1. Prepare the journal entries to record: (1) the issuance of stock by Jode; and (2) the payment of the combination costs. 2.Determine consolidated net income for the year ended December 31, 2017. 3. Determine consolidated Additional Paid-In Capital at December 31, 2017.

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ekkarill92 answered 1 year ago
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