Popper Co Acquired 80% of the Common Stock of Cocker Co

question 31

Multiple Choice

Popper Co. acquired 80% of the common stock of Cocker Co. on January 1, 2019, when Cocker had the following stockholders' equity accounts. 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, 2022.Popper did not pay any premium when it acquired its original interest in Cocker. On January 1, 2022, 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, 2022, 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?

• A) $0.
• B) Decrease it by $23,240.
• C) Decrease it by $68,250.
• D) Decrease it by $45,060.
• E) Decrease it by $64,720.

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Definitions:

CNC Bond Angle

The angle formed between two carbon atoms and a nitrogen atom connected in a molecule.

Hybridization

The concept in molecular chemistry and physics that describes the mixing of atomic orbitals to form new hybrid orbitals suitable for the pairing of electrons to form chemical bonds.

Indicated Atom

An atom within a molecule highlighted or specified for discussion or analysis.

Uracil

A nitrogen-containing base (a pyrimidine) found in RNA, where it pairs with adenine and replaces thymine during DNA transcription.