These Questions Are Based on the Following Information and Should

question 69

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, 2009, when Cocker had the following stockholders' equity accounts.
$\begin{array} { l r } \text { Common stock } - 40,000 \text { shares outstanding } & \$ 140,000 \\\text { Additional paid-in capital } & 105,000 \\\text { Retained earnings } & 476,000 \\ \text { Total stockholders' equity } & \$ 721,000 \\\end{array}$ 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 $21 per share.Popper did not acquire any of this newly issued stock.How would this transaction affect the additional paid-in capital of the parent company?

• A)$0.
• B)decrease it by $23,240.
• C)decrease it by $68,250.
• D)decrease it by $45,060.
• E)decrease it by $43,680.

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Definitions:

Environmental Literacy

The understanding and knowledge of the crucial relationships between natural systems and human societies, enabling individuals to make informed decisions regarding the environment.

Values

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Biosphere

A worldwide ecosystem that encompasses all organisms and their interactions, along with their connections to the earth's lithosphere, hydrosphere, and atmosphere.

Minimal Government Interference

Refers to a political and economic principle advocating for reduced government involvement in economic decisions and private enterprises.