Webb Company Purchased 90% of Jones Company for $990,000 When

question 76

Multiple Choice

Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000. There was no premium paid by Webb. Jones currently has 100,000 shares outstanding and a book value of $1,200,000.Assume Jones issues 20,000 new shares of its common stock to outside parties for $15 per share.What is the adjusted book value of Jones after the stock issuance?

• A) $1,500,000.
• B) $1,200,000.
• C) $1,350,000.
• D) $1,080,000.
• E) $1,335,000.

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Definitions:

Social Exchange Theory

A conceptual framework positing that social behavior is the result of an exchange process aiming to maximize benefits and minimize costs in human relationships.

Interpersonal Relationships

The connections and interactions between two or more people, which may be professional, personal, or otherwise.

Attribution Theory

A psychological theory that explains how individuals infer the causes of their own and others' behavior.

Systems Theory

An interdisciplinary theory that studies complex systems in numerous fields, focusing on the interactions and interdependencies within systemic structures.