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.

Recognize the importance of confidentiality and privilege in legal and professional communications.

Understand the implications of negligent misrepresentation within the context of professional advice.

Identify the legal requisites for establishing negligence and the standards of care prescribed by professions in general.

Understand the process and standards for establishing professional status within emerging professions.

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Definitions:

Marginal Cost

The expense incurred in manufacturing an extra unit of a product or service.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating excess over the opportunity cost.

Minimum Average Total Cost

The lowest point on the curve that shows the average cost of producing each unit of output when all input costs are considered over various output levels.

Marginal Cost

The cost added by producing one additional unit of a product or service.