These Questions Are Based on the Following Information and Should

question 37

Multiple Choice

These questions are based on the following information and should be viewed as independent situations.
Popper Co. acquired 80% of the common stock of Cocker Co. on January 1, 2011, 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, 2014.
On January 1, 2014, 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, 2014, Cocker issued 10,000 additional shares of common stock for $35 per share. Popper acquired 8,000 of these shares. How would this transaction affect the additional paid-in capital of the parent company?

• A) increase it by $28,700.
• B) increase it by $16,800.
• C) $0.
• D) increase it by $280,000.
• E) increase it by $593,600.

---

Definitions:

Competencies

Refers to the skills, knowledge, and abilities that are required for the successful performance of a job or task.

Behavioral Component

Refers to the actions or observable responses of a person associated with an attitude, belief, or knowledge.

Intention

A mental state that represents a commitment to carrying out an action or actions in the future.

Expressing

Involves the action of conveying thoughts, feelings, or information to others.