If Osorio retains a separate corporate existence, what amount was recorded as the investment in Osorio?

A)  $930.

B)  $820.

C)  $800.

D)  $835.

E)  $815.

Answer: C

Learning Objective: 02-06c

Topic: Journal entry―Investment with no dissolution

Difficulty: 2 Medium 

Blooms: Apply

AACSB: Knowledge Application

AICPA: BB Critical Thinking

AICPA: FN Measurement

Feedback: Total Consideration Paid = Cash and Stock

Cash: $400

Common Stock (Par Value): $1.00 × 40 shares = $40

APIC: Excess of fair value of stock over par value =  ($10 – $1)x(40 shares) = $9 × 40 = $360

Total Consideration: $400 + $40 + $360 = $800