In order to reduce the risk associated with a new line of business, Conservative Corporation established Spin Company as a wholly owned subsidiary. It transferred assets and accounts payable to Spin in exchange for its common stock. Spin recorded the following entry when the transaction occurred:

1. Based on the preceding information, what number of shares of $7 par value stock did Spin issue to Conservative? A. 10,000 B. 7,000 C. 8,000 D. 25,000

*I know the answer is $8,000 but if you can please show computations for that answer.

3. Based on the preceding information, what amount did Conservative report as its investment in Spin after the transfer of assets and liabilities? A. $181,000 B. $221,000 C. $263,000 D. $243,000

*I know the answer is $181,000 but if you can please show computations for that answer.

4. Based on the preceding information, immediately after the transfer, A. Conservative's total assets decreased by $23,000. B. Conservative's total assets decreased by $20,000. C. Conservative's total assets increased by $56,000. D. Conservative's total assets remained the same.

*I know the answer is B but how do you get that answer?

Cash and receivables 23,000 Inventory 15,000 Land 30,000 Buildings 100,000 Equipment 95,000 Accounts Payable Accumulated Depreciation Buildings Accumulated Depreciation Equipment Common Stock Additional Paid-In Capital 20,000 32,000 30,000 56,000 125,000