These Questions Are Based on the Following Information and Should

question 53

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. $$\begin{array} { l r } \text { Common stock - 40,000 shares outstanding } & \$ 140,000 \\\text { Additional paid-in capital } & 105,000 \\\text { Retained earnings } & 476,000 \\\hline \text { Total stockholders' equity } & \$ 721,000 \\\hline\end{array}$$ 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 reacquired 8,000 of the outstanding shares of its own common stock for $34 per share. None of these shares belonged to Popper. How would this transaction have affected the additional paid-in capital of the parent company?

• A) $0.
• B) Decrease it by $32,900.
• C) Decrease it by $45,700.
• D) Decrease it by $49,400.
• E) Decrease it by $50,500.

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Definitions:

Cardiac Output

The volume of blood the heart pumps per minute, a crucial parameter in assessing cardiac function.

Increased Preload

A condition where there is an increased volume of blood in the ventricles at the end of diastole, leading to enhanced cardiac output.

Tissue Perfusion

The process of delivery of blood to a capillary bed in the biological tissue, critical for delivering nutrients and oxygen.

Hypertension

A condition characterized by consistently high blood pressure.