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Earl was engaged by Farm Corp. to perform consulting services. Earls compensation for these services...

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Accounting

Earl was engaged by Farm Corp. to perform consulting services. Earls compensation for these services consisted of 1,000 shares of Farms $10 par value common stock, to be issued to Earl on completion of Earls services. On the execution date of Earls employment contract, Farms stock had a market value of $40 per share. Six months later, when Earls services were completed and the stock issued, the stocks market value was $50 per share. Farms management estimated that Earls services were worth $100,000 in cost savings to the company. As a result of this transaction, additional paid-in capital should increase by
A. $40,000
B. $90,000
C. $100,000
D. $30,000

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