The Financial Statements for Jode Inc

question 39

Essay

The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2012, follow. Lakely's buildings were undervalued on its financial records by $60,000. On December 31, 2012, 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.
Required:
Determine consolidated net income for the year ended December 31, 2012.

Comprehend the criteria for capitalization vs. expenses of software production costs and legal fees related to intangible assets protection.

Understand the differences in accounting treatments between different types of intangible assets (e.g., patents, copyrights, franchises, trademarks, goodwill).

Recognize the requirements and methods for goodwill recognition, impairment testing, and disclosure.

Differentiate between amortizable and non-amortizable intangible assets.

---

Definitions:

Concurrent Condition

In contract law, these are conditions that must occur or be performed at the same time by both parties involved in a contract.

Strict Performance

The requirement that a contract be executed precisely as agreed, without any deviations or allowances.

Contract Price

The total amount agreed upon by the parties involved in a contract for the sale of goods, services, or property.

Quasi-Contract

A legal concept that implies a contract exists to prevent unjust enrichment or unfair benefit, even though no formal contract exists between the parties.