Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

required A & B please Poseidon Company purchases 80 percent of the common stock of Stuart Company on January 1, 2020, when Stuart has the

required A & B please
image text in transcribed
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. Poseldon 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. 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Kin Lo, George Fisher

4th Edition

0135220491, 9780135220498

More Books

Students also viewed these Accounting questions

Question

How many degrees of freedom does ????e have?

Answered: 1 week ago