On January 1, 20X1, Paris Ltd

Multiple Choice

On January 1, 20X1, Paris Ltd. paid $600,000 for its 75% interest in the Scott Company when Scott had total equity of $550,000. Any excess of cost over book value was attributed to equipment with a 10-year life. On January 1, 20X3, Scott Company had the following stockholders' equity: On January 2, 20X3, Scott Company sold 2,500 additional shares of stock for $60 each in a private offering to noncontrolling shareholders. As a result of this sale, which of the following changes would appear in the 20X3 consolidated statements?

A) $7,500 loss
B) $37,500 loss
C) $37,500 decrease in controlling paid-in capital
D) $7,500 decrease in controlling paid-in capital