Neill acquires 8,000 of these shares. How will this transaction affect the parent company’s Additional Paid-In Capital account?
a. Has no effect on it.
b. Increases it by $20,500.
c. Increases it by $36,400.
d. Increases it by $82,300.
Neill Company purchases 80 percent of the common stock of Stamford Company on January 1, 2020, when Stamford has the following stockholders’ equity accounts:
On January 1, 2021, Stamford reports retained earnings of $620,000. Neill has accrued the increase in Stamford’s retained earnings through application of the equity method.
View the following problems as independent situations:
On January 1, 2021, Stamford issues 10,000 additional shares of common stock for $25 per share.
