Ryan Company Purchased 80% of Chase Company for $240,000 When

question 29

Multiple Choice

Ryan Company purchased 80% of Chase Company for $240,000 when Chase's book value was $300,000. Chase has 50,000 shares outstanding and currently has a book value of $400,000.Assume Chase reacquired 8,000 shares of its common stock from outsiders at $10 per share.When Ryan's new percent ownership is rounded to a whole number, what adjustment is needed for Ryan's investment in Chase account?

• A) $16,000 decrease.
• B) $60,000 decrease.
• C) $46,000 increase.
• D) $46,000 decrease.
• E) No adjustment is necessary.

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