AB Inc. acquired 100% stake in CD Inc. on January 1, 2013 by issuing 20,000 shares of common stock. The shares have a fair value of $15 per share. AB also paid $30,000 in stock issuance costs. Just before acquisition, AB had Common stock of $360,000 and Additional paid-in capital of 20,000. CD had Common stock of $80,000 and Additional paid- in capital of $40,000 and Retained earnings of $80,000. Assuming both companies continue to operate separately, consolidation entry (S) would include: Select one: O a. A credit to Common Stock with $80,000 O b. A credit to Investment account with $200,000 O c. A debit to Additional paid-in capital with $20,000 O d. A credit to retained earnings with $80,000

AB Inc. acquired 100% stake in CD Inc. on January 1, 2013 by issuing 20,000 shares of common stock. The shares have a fair value of $15 per share. AB also paid $30,000 in stock issuance costs. Just before acquisition, AB had Common stock of $360,000 and Additional paid-in capital of 20,000. CD had Common stock of $80,000 and Additional paid- in capital of $40,000 and Retained earnings of $80,000. Assuming both companies continue to operate separately, consolidation entry (S) would include: Select one: O a. A credit to Common Stock with $80,000 O b. A credit to Investment account with $200,000 O c. A debit to Additional paid-in capital with $20,000 O d. A credit to retained earnings with $80,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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