ADVANCED ACCOUNTING-LL
ADVANCED ACCOUNTING-LL
13th Edition
ISBN: 9781260232486
Author: Hoyle
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 6, Problem 21P

On January 1, 2018, Stamford issues 10,000 additional shares of common stock for $15 per share. Neill does not acquire any of this newly issued stock. How does this transaction affect the parent company’s Additional Paid-In Capital account?

  1. a. Has no effect on it.
  2. b. Increases it by $44,000.
  3. c. Decreases it by $35,200.
  4. d. Decreases it by $55,000.
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Required information These questions are based on the following information and should be viewed as independent situations. Popper Co. acquired 80% of the common stock of Cocker Co. on January 1, 2016, when Cocker had the following stockholders' equity accounts. Common stock - 40,000 shares outstanding Additional paid-in capital Retained earnings Total stockholders' equity $ $ 140,000 105,000 476,000 721,000 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, 2019. Popper did not pay any premium when it acquired its original interest in Cocker. On January 1, 2019, 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…

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ADVANCED ACCOUNTING-LL

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