Question

Subsidiary Company S had the following stockholders’ equity on January 1, 2014, prior to issuing 20,000 additional new shares to non-controlling shareholders:
Common stock ($1par), 100,000 shares issued and outstanding ..... $ 100,000
Paid-in capital in excess of par .................. 1,900,000
Retained earnings ........................ 2,000,000
Total equity ......................... $4,000,000
At that time, the parent company owned 90,000 Company S shares. Assume that the parent acquired the shares at a price equal to their book value. What is the impact on the parent’s investment account of the sale of 20,000 additional shares by the subsidiary for $45 per share?


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  • CreatedApril 13, 2015
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