Paul & Stephan: on January 1, 20X1, Paul, Inc On January 2, 20X3, Stephan Sold 2,000 Additional Shares in a 90

question 24

Multiple Choice

Paul & Stephan: On January 1, 20X1, Paul, Inc. acquired a 90% interest in Stephan Company. The $45,000 excess of purchase price (parent's share only) was attributable to goodwill. On January 1, 20X3, Stephan Company had the following stockholders' equity:
$\begin{array}{lr}\text { Common stock, } \$ 10 \text { par } & \$ 100,000 \\\text { Other paid-in capital } & 200,000 \\\text { Retained earnings } & 300,000\end{array}$ On January 2, 20X3, Stephan sold 2,000 additional shares in a private offering.
-Refer to Paul and Stephan. Stephan issued the new shares for $70 per share; Paul, Inc. purchased 600 of the shares. As a result of this sale, there is a(n)

• A) gain on the consolidated income statement of $5,000.
• B) decrease in the controlling interest paid-in excess of $5,000.
• C) increase in the controlling interest paid-in capital in excess of par of $5,000
• D) increase in the controlling interest Retained Earnings of $5,000

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Definitions:

Supercenter

A large retail store that combines groceries and general merchandise goods in a single location.

Power Center

A concentration of powerful entities or organizations that collectively exert influence over a specific domain or sector.

Central Business District

The commercial and often geographical heart of a city, characterized by high densities of retail businesses, offices, and services.

Regional Shopping Center

A large shopping center designed to serve a large area or region, typically housing a variety of stores, services, and often major department stores as anchor tenants.