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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, 2009, 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, 2012.
On January 1, 2012, 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, 2012, 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?
Commercial Standards
Commercial Standards are established norms or criteria within a business sector that guide the quality, performance, and conduct of activities in that field.
Treated
Subjected to a specific process or course of action, typically to achieve a certain effect or outcome.
Owns
To own means to have legal right or title to an object, property, or asset, granting the holder exclusive rights to the use, enjoyment, and disposition of that asset.
Accepted
Acknowledged or agreed upon; an offer or proposal that has been received and approved.
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