Webb Company Owns 90% of Jones Company Jones Sells 20,000 Shares of Previously Unissued Shares of Its

question 100

Multiple Choice

Webb Company owns 90% of Jones Company. The original balances presented for Jones and Webb as of January 1, 2013, are as follows: $\begin{array}{lr}\text { Jones Company: } & \\\text { Shares outstanding } & 100,000 \\\text { Book value of Jones } & \$ 1,200,000 \\\text { Book value per share } & \$ 12 \\\text { Webb Company: } & \\\text { Shares owned of Jones } &90,000 \\\text { Book value of investment } & \$ 1,080,000\end{array}$ Jones sells 20,000 shares of previously unissued shares of its common stock to outside parties for $10 per share. What is the adjusted book value of Jones after the sale of the shares?

• A)$200,000.
• B)$1,400,000.
• C)$1,280,000.
• D)$1,050,000.
• E)$1,440,000.

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