Asked by
Nikhil Rakheja
on Dec 10, 2024
Verified
Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000. Jones currently has 100,000 shares outstanding and a book value of $1,200,000.Jones sells 20,000 shares of previously unissued shares of its common stock to outside parties for $10 per share.What adjustment is needed for Webb's investment in Jones account?
A) $180,000 increase.
B) $180,000 decrease.
C) $45,000 decrease.
D) $45,000 increase.
E) No adjustment is necessary.
Investment Account
A financial account held by an investor with a brokerage or financial institution, primarily used for holding stocks, bonds, mutual funds, and other securities.
Previously Unissued Shares
Shares that are authorized by a corporation's charter but have not been issued or sold to investors.
- Absorb the details and effects of share transactions and acquisitions in relation to the control over subsidiaries and the investments by the parent entity.
Verified Answer
RR
Learning Objectives
- Absorb the details and effects of share transactions and acquisitions in relation to the control over subsidiaries and the investments by the parent entity.
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