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give answer in 2 step with explanation at the end of each step and final answer at the end:ze le i TRA a] a Igo) (LO 6-7) Be fa pre Gi ® a 0) (LO 67) GF 3 TE 2 EAE at 16, Incorporated, acquired 36,000 shares of Marmon Company several scoustona ie RE La aR A years ago for $840,000, cq i is ported a book value of $940,000, and Albuquerque assessed the fai value of the psa beh Lot $210,000. ia cquisition-date fair value over book value was assigned to broadcast licenses with Indefinite lives. Since the acg 4 fieuntilthis point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast i A id Adel] f1® present time, Marmon reports $1080,000 as total stockholders’ equity, which is broken down as follows: cons on stock ($10 par value) $ 450,000 * e Additional paid-in capital 470,000 Retained earnings 160,000 i: BR rotal $ 1,080,000 F IRE the following as independent situations: aa y Required: a. & b. Marmon sells 15,000 and 3,000 shares of previously unissued common stock to the public for $31 and $15 per share 1 Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this s y transaction? 5 p Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field: Do not round & Intermediate calculations. i ” E © Answer is complete but not entirely correct. BE. CE TT — a ; [|| Additonal paidin capital o| ia - EEE 00 aaa pi Se CT rename 2 of [wwel

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give answer in 2 step with explanation at the end of each step and final answer at the end:Uploaded Imageze le i TRA a] a Igo) (LO 6-7) Be fa pre Gi ® a 0) (LO 67) GF 3 TE 2 EAE at 16, Incorporated, acquired 36,000 shares of Marmon Company several scoustona ie RE La aR A years ago for $840,000, cq i is ported a book value of $940,000, and Albuquerque assessed the fai value of the psa beh Lot $210,000. ia cquisition-date fair value over book value was assigned to broadcast licenses with Indefinite lives. Since the acg 4 fieuntilthis point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast i A id Adel] f1® present time, Marmon reports $1080,000 as total stockholders’ equity, which is broken down as follows: cons on stock ($10 par value) $ 450,000 * e Additional paid-in capital 470,000 Retained earnings 160,000 i: BR rotal $ 1,080,000 F IRE the following as independent situations: aa y Required: a. & b. Marmon sells 15,000 and 3,000 shares of previously unissued common stock to the public for $31 and $15 per share 1 Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this s y transaction? 5 p Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field: Do not round & Intermediate calculations. i ” E © Answer is complete but not entirely correct. BE. CE TT — a ; [|| Additonal paidin capital o| ia - EEE 00 aaa pi Se CT rename 2 of [wwel

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Asked by: Aman Kori
Created at: 2025-10-16 02:32:37

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## Step : **Situation a - Marmon Sells 15,000 Shares at $31 Each** - **Explanation:** Marmon issues 15,000 new shares to the public at $31 per share. Albuquerque, the investor, purchases **none** of these shares. As a result, Albuquerque's **ownership percentage** in Marmon decreases, leading to a reduction in its investment account. The entry recognizes the change in equity due to dilution. - **Calculation:** Proceeds from sale = 15,000 shares × $31 = **$465,000** Par value of shares = 15,000 × $10 = **$150,000** Additional paid-in capital = $465,000 - $150,000 = **$315,000** **Effect on Albuquerque's Investment:** The decrease in Albuquerque's ownership interest is measured by the proportionate share of the increase in Marmon's net assets: - Net assets increased by $465,000. - Albuquerque's ownership percentage decreases, so the company must decrease its "Investment in Marmon" account by the proportionate share of the increase in net assets given up. According to the journal entry in the image, the amount is **$64,500**: - **Debit:** Additional paid-in capital $64,500 - **Credit:** Investment in Marmon $64,500 **Explanation:** This entry reduces Albuquerque's investment to reflect the dilution, and increases additional paid-in capital as required by equity accounting. --- ## Step 2: **Situation b - Marmon Sells 3,000 Shares at $15 Each** - **Explanation:** Marmon issues another 3,000 shares at $15 each. Albuquerque does not participate. Again, Albuquerque's ownership percentage decreases, so the investment account is adjusted for the decrease in equity. - **Calculation:** Proceeds from sale = 3,000 shares × $15 = **$45,000** Par value of shares = 3,000 × $10 = **$30,000** Additional paid-in capital = $45,000 - $30,000 = **$15,000** **Effect on Albuquerque's Investment:** The change in Albuquerque's investment is calculated as the proportionate share of the increase in net assets given up. The entry from the image is: - **Debit:** Additional paid-in capital $19,800 - **Credit:** Investment in Marmon $19,800 **Explanation:** This entry further reduces Albuquerque's investment to reflect the additional dilution and increases additional paid-in capital. --- ## **Final Answer** - **Situation a Journal Entry:** - Debit: Additional paid-in capital $64,500 - Credit: Investment in Marmon $64,500 - **Situation b Journal Entry:** - Debit: Additional paid-in capital $19,800 - Credit: Investment in Marmon $19,800 **Each entry adjusts for the dilution in Albuquerque's ownership caused by Marmon issuing new shares to the public, which Albuquerque did not purchase. This reduces Albuquerque's investment and increases additional paid-in capital.**

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