# Shares of Common Stock Problem

#### Joystar1977

These questions are based on the following information and should be viewed as independent situations. Popper Co. acquired 80% of the common stock of Cocker Co on January 1, 2009, when Cocker had the following stockholders' equity accounts.

Common stock- 40,000 shares outstanding = \$140,000
Retained earnings = \$476,000

Total stockholders' equity = \$721,000

To acquire this interest in Cocker, Popper paid a total of \$682,000 with any excess acquisition date fair value over book value being allocated to goodwill, which has been measured for impairment annually and has not been determined to be impaired as of January 1, 2012. On January 1, 2012, Cocker reported a net book value of \$1,113,000 before the following transactions were conducted. Popper uses the equity method to account for its investment in Cocker, thereby reflecting the change in book value of Cocker.

On January 1, 2012, Cocker issued 10,000 additional shares of common stock for \$35 per share. Popper acquired 8,000 of these shares. How would this transaction affect the additional paid-in capital of the parent company?

Can someone please explain this problem to me and how you would work it out? I am having a really hard time trying to figure it out.