Reference no: EM131801997
Carnes has the following account balances as of May 1, 2012 before an acquisition transaction takes place.
Inventory $100,000
Land 400,000
Buildings, net 500,000
Common Stock $10 Par 600,000
Addl. PIC 200,000
Retained Earnings 200,000
Revenues 450,000
Expenses 250,000
The fair value of Carnes' Land and Buildings are $650,000 and $550,000, respectively. On May 1, 2012, Riley Company issues 30,000 shares of its $10 par value ($25 fair value) common stock in exchange for all of the shares of Carnes' common stock. Riley paid $10,000 for costs to issue the new shares of stock. Before the acquisition, Riley has $700,000 in its common stock account and $300,000 in its additional paid-in capital account.
At the date of acquisition, by how much does Riley's additional paid-in capital increase or decrease?