Panton, Inc Glotfelty Issues 5,000 Shares of Previously Unissued Stock to the Ago

question 5

Essay

Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At the present time, Glotfelty is reporting the following stockholders' equity: $$\begin{array} { | l | r | } \hline \text { Common stock, } \$ 10 \text { par value } ( 20,000 \text { shares outstanding) } & \$ 200,000 \\\hline \text { Additional paid in capital } & 100,000 \\\hline \text { Retained earnings } & \underline { 300,000 } \\\hline & \$ 600,000 \\\hline & \\\hline\end{array}$$ Glotfelty issues 5,000 shares of previously unissued stock to the public for $27 per share. None of this stock is purchased by Panton.
-Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At the present time, Glotfelty is reporting the following stockholders' equity: $$\begin{array} { | l | r | } \hline \text { Common stock, } \$ 10 \text { par value } ( 20,000 \text { shares outstanding) } & \$ 200,000 \\\hline \text { Additional paid in capital } & 100,000 \\\hline \text { Retained earnings } & \underline { 300,000 } \\\hline & \$ 600,000 \\\hline & \\\hline\end{array}$$
Glotfelty issues 5,000 shares of previously unissued stock to Panton for $35 per share.
Required: Describe how this transaction would affect Panton's books.

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