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Carnes has the following account balances as of December 31, 2017 before an acquisition transaction takes

place.

 

  Inventory $100,000 Land 400,000 Buildings (net) 500,000 Common stock ($10 par) 600,000 Additional paid-in capital 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 December 31, 2017, 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?

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