Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 3

Neill Company purchases 80 percent of the common stock of Stamford Company on January 1, 2013, when Stamford has the following stockholders' equity accounts:

To acquire this interest in Stamford, Neill pays a total of $592,000. The acquisition-date fair value of the 20 percent noncontrolling interest was $148,000. Any excess fair value was allocated to goodwill, which has not experienced any impairment.
On January 1, 2014, 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:
On January 1, 2014, Stamford issues 10,000 additional shares of common stock for $25 per share. Neill acquires 8,000 of these shares. How will this transaction affect the parent company's Additional Paid-In Capital account
A) Has no effect on it.
B) Increases it by $20,500.
C) Increases it by $36,400.
D) Increases it by $82,300.