Problem $6-19($Static$)($LO $6-7)$

Poseidon Company purchases $80$ percent of the common stock of Stuart Company on January $1,2020,$ when Stuart has the following

stockholders' equity accounts:

To acquire this interest in Stuart, Poseidon pays a total of $$592,000.$ The acquisition$-$date fair value of the $20$ percent noncontrolling

interest was $$148,000.$ Any excess fair value was allocated to an indefinite$-$lived intangible, which has not experienced any impairment.

On January $1,2021,$ Stuart reports retained earnings of $$620,000.$ Poseidon has accrued the increase in Stuart's retained earnings

through application of the equity method.

Required:

a$.$ On January $1,2024,$ Stuart issues $10,000$ additional shares of common stock for $$25$ per share. Poseidon acquires $8,000$ of these

shares. Compute the effect of this transaction on the parent company's Additional Paid$-$In Capital account.

b$.$ On January $1,2024,$ Stuart issues $10,000$ additional shares of common stock for $$15$ per share. Poseidon does not acquire any of

this newly issued stock. Compute the effect of this transaction on the parent company's Additional Paid$-$In Capital account.

c$.$ On January $1,2024,$ Stuart reacquires $8,000$ of the outstanding shares of its own common stock for $$24$ per share. None of these

shares belonged to Poseidon. Compute the effect of this transaction on the parent company's Additional Paid$-$In Capital account.

Answer is complete but not entirely correct.

On January $1,2024,$ Stuart issues $10,000$ additional shares of common stock for $$25$ per share. Poseidon acquires $8,000$ of

these shares. Compute the effect of this transaction on the parent company's Additional Paid$-$In Capital account.Poseidon Company purchases $80$ percent of the common stock of Stuart Company on January $1,2020,$ when Stuart has the following stockholders$$ equity accounts:

Common stock$40,000$ shares outstanding $ $100,000$

Additional paid$-$in capital $75,000$

Retained earnings, $1/1/20540,000$

Total stockholders$$ equity $ $715,000$

To acquire this interest in Stuart, Poseidon pays a total of $$592,000.$ The acquisition$-$date fair value of the $20$ percent noncontrolling interest was $$148,000.$ Any excess fair value was allocated to an indefinite$-$lived intangible, which has not experienced any impairment.

On January $1,2021,$ Stuart reports retained earnings of $$620,000.$ Poseidon has accrued the increase in Stuart$$s retained earnings through application of the equity method.

Required:

On January $1,2024,$ Stuart issues $10,000$ additional shares of common stock for $$25$ per share. Poseidon acquires $8,000$ of these shares. Compute the effect of this transaction on the parent company's Additional Paid$-$In Capital account.

On January $1,2024,$ Stuart issues $10,000$ additional shares of common stock for $$15$ per share. Poseidon does not acquire any of this newly issued stock. Compute the effect of this transaction on the parent company$$s Additional Paid$-$In Capital account.

On January $1,2024,$ Stuart reacquires $8,000$ of the outstanding shares of its own common stock for $$24$ per share. None of these shares belonged to Poseidon. Compute the effect of this transaction on the parent company$$s Additional Paid$-$In Capital account.