Popper Co. purchased 80% of the common stock of Cocker Co. on January 1, 2001, when Cocker had the following stockholders' equity accounts.

Common stock 40,000 shares outstanding $140,000

Additional Paid-in capital 105,000

Retained earnings 476,000

Total Stockholders equity 721,000

To acquire this interest in Cocker, Popper paid a total of $682,000 with any excess cost being allocated to goodwill, which has been measured for impairment annually and has not been determined to be impaired as of January 1, 2007.

On January 1, 2007, Cocker reported a net book value of $1,113,000. Popper had accrued the increase in Cocker's book value through application of the equity method.

21. On January 1, 2007, Cocker issued 10,000 additional shares of common stock for $21 per share. Popper did not acquire any of this newly issued stock. How would this transaction affect the additional paid-in capital of the parent company?

The answer is decrease it by $43,680. PLEASE SHOW YOUR WORK AS TO WHY!