On January 1, 2021, Stamford reacquires 8,000 of the outstanding shares of its own common stock for

Question:

On January 1, 2021, Stamford reacquires 8,000 of the outstanding shares of its own common stock for $24 per share. None of these shares belonged to Neill. How does this transaction affect the parent company’s Additional Paid-In Capital account?
a. Has no effect on it.
b. Decreases it by $55,000.
c. Decreases it by $35,000.
d. Decreases it by $28,000.


Neill Company purchases 80 percent of the common stock of Stamford Company on January 1, 2020, when Stamford has the following stockholders’ equity accounts:

On January 1, 2021, Stamford reports retained earnings of $620,000. Neill has accrued the increase in Stamford’s retained earnings through application of the equity method. View the following problems as independent situations.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: