answer is given please explain how it is calculated luckys company acquires waterview inc by iss

First, we need to calculate the total consideration transferred by Lucky's Company to acquire Wa

Question

Lucky's Company acquires Waterview, Inc., by issuing 40,000 shares of $1 par common stock with a market price of $25 per share on the acquisition date and paying $125,000 cash. The assets and liabilities on Waterview's balance sheet were valued at fair values except equipment that was undervalued by $300,000. There was also an unrecorded patent valued at $40,000, as well as an unrecorded trademark valued at $75,000. In addition, the agreement provided for additional consideration, valued at $60,000, if certain earnings targets were met. The pre-acquisition balance sheets for the two companies at acquisition date are presented below. Lucky's Company Waterview, Inc. Cash $300,000 $260,000 Accounts receivable $250,000 $135,000 Inventory $254,000 $275,000 Property, plant, and equipment $2,300,000 $356,500 $3,104,000 $1,026,500 Accounts payable $45,000 $37,500 Salaries and taxes payable $450,000 $46,000 Notes payable $500,000 $450,000 Common stock $250,000 $60,000 Additional paid-in capital $950,000 $106,500 Retained earnings $909,000 $326,500 $3,104,000 $1,026,500 1) Compute consolidated additional paid-in capital. Answer = $1,910,000 How was $1,910,000 calculated?

          Lucky's Company acquires Waterview, Inc., by issuing 40,000 shares of $1 par common stock with a market price of $25 per share on the acquisition date and paying $125,000 cash. The assets and liabilities on Waterview's balance sheet were valued at fair values except equipment that was undervalued by $300,000. There was also an unrecorded patent valued at $40,000, as well as an unrecorded trademark valued at $75,000. In addition, the agreement provided for additional consideration, valued at $60,000, if certain earnings targets were met. 
The pre-acquisition balance sheets for the two companies at acquisition date are presented below.
Lucky's Company
Waterview, Inc.
Cash
$300,000
$260,000
Accounts receivable
$250,000
$135,000
Inventory
$254,000
$275,000
Property, plant, and equipment 
$2,300,000
$356,500
$3,104,000
$1,026,500
Accounts payable
$45,000
$37,500
Salaries and taxes payable
$450,000
$46,000
Notes payable
$500,000
$450,000
Common stock
$250,000
$60,000
Additional paid-in capital
$950,000
$106,500
Retained earnings
$909,000
$326,500
$3,104,000
$1,026,500
1) Compute consolidated additional paid-in capital. 
Answer = $1,910,000
How was $1,910,000 calculated?

Added by Phyllis J.

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