At the date of acquisition, by how much does Riley's additional paid-in capital increase or decrease?
A) $ 0.
B) $440,000 increase.
C) $450,000 increase.
D) $640,000 increase.
E) $650,000 decrease.

Question

Quizplus · Accepted Answer

Riley's additional paid-in capital increases by $440,000 because the fair value of the net assets acquired ($640,000) exceeds the purchase price ($200,000).

At the Date of Acquisition, by How Much Does Riley's