Question 4

The stockholders equities of Riyadh Corporation and Jeddah Corporation at January 1 were as follows:

Particulars	Riyadh	Jeddah
Capital stock, $10 par	3,000,000	1,600,000
Other paid-in capital	400,000	800,000
Retained earnings	1,200,000	600,000
Stockholders equity	4,600,000	3,000,000

Additional Information:

1- On January 2, Riyadh issued 300,000 of its shares with a market value of $20 per share for all of Jeddahs shares, and Jeddah was dissolved.

2- On January 2, Riyadh paid $10,000 to register and issue the shares.

3- On January 2, Riyadh paid $20,000 for other direct costs of combination.

The stockholders equity s Riyadh Corporation on January 2 is:

	A.	10,570,000
	B.	10,530,000
	C.	10,600,000
	D.	7,600,000