Question 2 The financial statements for Joe Inc. and Lorens Corp., just prior to their combination, for the year ending December 31, 2017, follow. Lorens's buildings were undervalued on its financial records by $60,000. Joe Inc Lorens Inc $ $ Revenues 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 (from above) 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 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, 12/31/17 710,000 600,000 Total liabilities and stockholders’ equity 1,800,000 1,310,000 On December 31, 2017, Joe issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Lorens. Joe's shares had a fair value on that date of $35 per share. Joe paid $34,000 to an investment bank for assisting in the arrangements. Joe also paid $24,000 in stock issuance costs to effect the acquisition of Lorens. Lorens will retain its incorporation. Required: a. Prepare the journal entries to record: (1) the issuance of stock by Joe; and (2) the payment of the combination costs. b. Determine consolidated net income for the year ended December 31, 2017.