When It Purchased Sutton, Inc

question 40

Multiple Choice

When it purchased Sutton, Inc. on January 1, 20X1, Pavin Corporation issued 500,000 shares of its $5 par voting common stock. On that date the fair value of those shares totaled $4,200,000. Related to the acquisition, Pavin had payments to the attorneys and accountants of $200,000, and stock issuance fees of $100,000. Immediately prior to the purchase, the equity sections of the two firms appeared as follows: Immediately after the purchase, the consolidated balance sheet should report paid-in capital in excess of par of

• A)$8,900,000
• B)$9,100,000
• C)$9,200,000
• D)$9,300,000

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