Prepare the journal entry to record the issuance

Assignment Help Accounting Basics

Reference no: EM13228527

Question 1. ) 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.

-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. (

Question 2) The financial statements for Metzger Inc. and Ortiz Corp., just prior to their combination, for the year ending December 31, 20X2, follow. Ortiz's buildings were undervalued on its financial records by $80,000.

Metzger Inc. Ortiz Corp.
Revenues $1,800,000 $700,000
Expenses (1,580,000) (590,000)
Net income $220,000 $110,000

Retained earnings, January 1, 2012 800,000 600,000
Net income (above) 220,000 110,000
Dividends paid (130,000) (80,000)
Retained earnings, December 31, 2012 $890,000 $630,000

Cash $240,000 $160,000
Receivables and inventory 270,000 260,000
Buildings (net) 850,000 500,000
Equipment (net) 800,000 490,000
Total assets $2,160,000 $1,410,000

Liabilities $310,000 $155,000
Common stock 850,000 530,000
Additional paid-in capital 110,000 95,000
Retained earnings, December 31, 20X2 (above) 890,000 630,000
Total liabilities and stockholders' equity $2,160,000 $1,410,000

On December 31, 20X2, Metzger issued 58,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Ortiz. Metzger's shares had a fair value on that date of $40 per share. Metzger paid $38,000 to an investment bank for assisting in the arrangements. Metzger also paid $28,000 in stock issuance costs to effect the acquisition of Ortiz. Ortiz will retain its incorporation.

-1) Prepare the journal entry to record the issuance of common stock by Metzger.
-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. (Points : 14)

Question 3) The financial statements for Metzger Inc. and Ortiz Corp., just prior to their combination, for the year ending December 31, 20X2, follow. Ortiz's buildings were undervalued on its financial records by $80,000.

Metzger Inc. Ortiz Corp.
Revenues $1,800,000 $700,000
Expenses (1,580,000) (590,000)
Net income $220,000 $110,000

Retained earnings, January 1, 2012 800,000 600,000
Net income (above) 220,000 110,000
Dividends paid (130,000) (80,000)
Retained earnings, December 31, 2012 $890,000 $630,000

Cash $240,000 $160,000
Receivables and inventory 270,000 260,000
Buildings (net) 850,000 500,000
Equipment (net) 800,000 490,000
Total assets $2,160,000 $1,410,000

Liabilities $310,000 $155,000
Common stock 850,000 530,000
Additional paid-in capital 110,000 95,000
Retained earnings, December 31, 20X2 (above) 890,000 630,000
Total liabilities and stockholders' equity $2,160,000 $1,410,000

On December 31, 20X2, Metzger issued 58,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Ortiz. Metzger's shares had a fair value on that date of $40 per share. Metzger paid $38,000 to an investment bank for assisting in the arrangements. Metzger also paid $28,000 in stock issuance costs to effect the acquisition of Ortiz. Ortiz will retain its incorporation.

-1) Prepare the journal entry to record the issuance of common stock by Metzger.
-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.

Reference no: EM13228527

Questions Cloud

Discuss how current laws regarding search : Discuss how current laws regarding search and seizure have the potential to violate the Fourth Amendment. In your response, provide specific examples of how this violation may occur.

Principles and instrunmentaion of conductomery : Write he basic principles and instrunmentaion of conductomery

Explain hydrogen ion concentration in the anode compartment : Consider the following cell: Pt|H2(g, 0.645 atm)|H (aq, ? M)||Ag (aq, 1.00 M)|Ag(s) If the measured cell potential is 1.20 V at 25 °C and the standard reduction potential of the Ag /Ag half-reaction couple is 0.80 V, calculate the hydrogen ion con..

What is the peak output voltage with feedback : 3) If the input voltage to a Full-Wave Bridge Peak Rectifier is vi(t) = 10.4sin(600t) Volts, what is the peak output voltage. Assume all diodes have a 0.7V drop, (ie. VD = 0.7V). 4) For the previous problem, if the resistor in the circuit is equal t..

Prepare the journal entry to record the issuance : 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.

Hitlers willing execution and ordinary men : "Hitlers willing execution" and "Ordinary men" what is the central question these two articles are discussing?

Explain how much heat was released : The combustion of propane illustrated by the following reaction releases 2428 KJ per mole of reaction. A sample of propane is burned at 59 degrees celsius and 746 mm Hg. The process produces 39.7 L of CO2(g). How much heat was released?

Explain the nurses role in the evaluation and management : Explain the nurse's role in the evaluation and management of selected diseases and disorders.

Explain acetate buffer with acetic acid and sodium acetate : Describe three ways to could make and acetic acid/acetate buffer with acetic acid, sodium acetate, deionized water, a solution of hydrochloric acid and a solution of sodium hydroxide.

User Account

All Pages