Porpoise Corporation Acquired Sims Company Through an Exchange of Common

question 6

Multiple Choice

Porpoise Corporation acquired Sims Company through an exchange of common shares.All of Sims' assets and liabilities were immediately transferred to Porpoise.Porpoise Company's common stock was trading at $20 per share at the time of exchange.The following selected information is also available: $\begin{array}{lcc} &\text { Porpoise Company }\\& \text { Before Acquisition } & \text { After Acquisition } \\\text { Par value of shares outstanding } & \$ 200,000 & \$ 250,000 \\\text { Additional Paid in Capital } & 350,000 & 550,000\end{array}$ What number of shares was issued at the time of the exchange?

• A)5,000
• B)17,500
• C)12,500
• D)10,000

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Definitions:

Aversion Therapy

A form of psychological treatment in which an undesirable behavior is paired with an unpleasant stimulus to reduce the occurrence of the behavior.

Modeling

A learning process where individuals learn or adapt behaviors by observing others, also known as observational learning.

Reinforcement

Any event or stimulus that, when following a response, increases the probability that the response will occur again.

Token Economy

A system of behavior modification based on the systematic reinforcement of target behavior, where tokens that can be exchanged for various rewards are used as reinforcers.