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al _ty 105,000 476,000 $ 721,000 Popper paid a total of $682,000 with any excess acquisition date fair value over b d for impairment annually and has not been determined to be impaired as of Janu

al _ty 105,000 476,000 $ 721,000 Popper paid a total of $682,000 with any excess acquisition date fair value over b d for impairment annually and has not been determined to be impaired as of Janu

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Popper Company acquired 80% of the common stock of Cocker Company on January 1, 2022, when Cocker had the following stockholders' equity accounts. Common stock 40,000 shares outstanding $ 140,000 105,000 476,000 $ 721,000 Additional paid-in capital Retained earnings Total stockholders' equity To acquire this interest in Cocker, Popper paid a total of $682,000 with any excess acquisition date fair value over book value being allocated to goodwill, which has been measured for impairment annually and has not been determined to be impaired as of January 1, 2025. Popper did not pay any premium when it acquired its original interest in Cocker. On January 1, 2025, Cocker reported a net book value of $1,113,000 before the following transactions were conducted. Popper uses the equity method to account for its investment in Cocker, thereby reflecting the change in book value of Cocker. On January 1, 2025, Cocker issued 10,000 additional shares of common stock for $21 per share. Popper did not acquire any of this newly issued stock. How would this transaction affect the additional paid-in capital of the parent company? Multiple Choice O < Prev 31 20 of 20 # Next Sep 16 5:05 C
Transcribed Image Text:Popper Company acquired 80% of the common stock of Cocker Company on January 1, 2022, when Cocker had the following stockholders' equity accounts. Common stock 40,000 shares outstanding $ 140,000 105,000 476,000 $ 721,000 Additional paid-in capital Retained earnings Total stockholders' equity To acquire this interest in Cocker, Popper paid a total of $682,000 with any excess acquisition date fair value over book value being allocated to goodwill, which has been measured for impairment annually and has not been determined to be impaired as of January 1, 2025. Popper did not pay any premium when it acquired its original interest in Cocker. On January 1, 2025, Cocker reported a net book value of $1,113,000 before the following transactions were conducted. Popper uses the equity method to account for its investment in Cocker, thereby reflecting the change in book value of Cocker. On January 1, 2025, Cocker issued 10,000 additional shares of common stock for $21 per share. Popper did not acquire any of this newly issued stock. How would this transaction affect the additional paid-in capital of the parent company? Multiple Choice O < Prev 31 20 of 20 # Next Sep 16 5:05 C
Decrease it by $64,720. Decrease it by $23,240. $0. Decrease it by $45,060. Decrease it by $68,250. 3 < Prev Saved 20 of 20 ● G Next W Help Sa L
Transcribed Image Text:Decrease it by $64,720. Decrease it by $23,240. $0. Decrease it by $45,060. Decrease it by $68,250. 3 < Prev Saved 20 of 20 ● G Next W Help Sa L
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