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, 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.