Pan Corporation Has Total Stockholders' Equity of $5,000,000 Consisting of $1,000,000

question 35

Multiple Choice

Pan Corporation has total stockholders' equity of $5,000,000 consisting of $1,000,000 of $10 par value Common Stock,$1,000,000 of Additional Paid-in Capital,and $3,000,000 of Retained Earnings.Pan owns 80% of Sailor Corporation's common stock purchased at book value,which equals fair value.Sailor has $900,000 of 10% cumulative preferred stock outstanding,with no preferred dividends in arrears.The preferred stock has no call price,redemption price or liquidation price.Pan acquired 60% of the preferred stock of Sailor for $500,000.After this transaction the balances in Pan's Retained Earnings and Additional Paid-in Capital accounts,respectively,are

• A)$2,960,000 and $1,000,000.
• B)$3,000,000 and $960,000.
• C)$3,000,000 and $1,040,000.
• D)$3,040,000 and $1,000,000.

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Definitions:

South Korean Government

The administrative and political systems that govern the Republic of Korea, encompassing its executive, legislative, and judicial branches.

North Korea

A country in East Asia, officially known as the Democratic People's Republic of Korea, characterized by its totalitarian regime and significant political and social isolation from most of the world.

Transnational Corporations

Large companies that operate in multiple countries, exercising an influence on global economics and politics beyond national borders.

National Governments

The primary governing bodies of sovereign nations, responsible for creating and enforcing laws, policies, and administrative functions.