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1. Parker Company issued 10,000 shares of S10 par common stock (market value of $30 per share) for the all of the outstanding stock of Schein Company. Direct acquisition costs were $15,000. Indirect acquisition costs were $5,000 Stock issuance costs were $3,000. As a result of this transaction, Parkers Additional Paid in Capital account will increase by what amount?
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Answer #1

Cost of par common stock (10000 share *10)

100000

Add: Capital in excess of par value (10000 sh. *20)

200000

Subtract : Direct acquisition cost

(15000)

Subtract: Indirect acquisition cost

(5000)

Subtract: Stock issuance cost

(3000)

Total Shareholder’s equity

277000

Outstanding stock held by Schein Company

(100000)

Parker’s additional paid in capital account

177000
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