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Polk issues common stock to acquire all the assets of the Sam Company on January 1, 20X5. There is a contingent share agreement, which states
Polk issues common stock to acquire all the assets of the Sam Company on January 1, 20X5. There is a contingent share agreement, which states that if the income of the Sam Division exceeds a certain level during 20x5 and 20X6, additional shares will be issued on January 1, 20x7. The impact of issuing the additional shares is to a. increase the price assigned to fixed assets on acquisition date. b. increase Paid-in Capital Contingent Share Agreement on acquisition date, and to reassign the amounts assigned to equity accounts at the date when the contingent event happens. c. reduce retained earnings on acquisition date. d. record less goodwill on acquisition date
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