When it purchased Sutton, Inc. on January 1, 20X1, Pavin Corporation issued 500,000 shares of its $5 par voting common stock. On that date the fair value of those shares totaled $4,200,000. Related to the acquisition, Pavin had payments to the attorneys and accountants of $200,000, and stock issuance fees of $100,000. Immediately prior to the purchase, the equity sections of the two firms appeared as follows: Immediately after the purchase, the consolidated balance sheet should report paid-in capital in excess of par of
A)$8,900,000
B)$9,100,000
C)$9,200,000
D)$9,300,000

Question

When it purchased Sutton, Inc. on January 1, 20X1, Pavin Corporation issued 500,000 shares of its $5 par voting common stock. On that date the fair value of those shares totaled $4,200,000. Related to the acquisition, Pavin had payments to the attorneys and accountants of $200,000, and stock issuance fees of $100,000. Immediately prior to the purchase, the equity sections of the two firms appeared as follows:  Immediately after the purchase, the consolidated balance sheet should report paid-in capital in excess of par of
A)$8,900,000 
B)$9,100,000 
C)$9,200,000 
D)$9,300,000

Quizplus · Accepted Answer

11eb11de_9332_2149_ad38_49244b6349a8_TB2014_00 Sutton's paid-in capital in excess of par would be eliminated in consolidation.

When It Purchased Sutton, Inc