Webb Company Owns 90% of Jones Company Assume Jones Issues 20,000 New Shares of Its Common Stock

question 48

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: $\begin{array}{lr}\text { Jones Company: } & \\\text { Shares outstanding } & 100,000 \\\text { Book value of Jones } & \$ 1,200,000 \\\text { Book value per share } & \$ 12 \\\text { Webb Company: } & \\\text { Shares owned of Jones } &90,000 \\\text { Book value of investment } & \$ 1,080,000\end{array}$ Assume Jones issues 20,000 new shares of its common stock for $15 per share. Of this total, Webb acquires 18,000 shares to maintain its 90% interest in Jones. 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.

---

Definitions:

IUPAC Name

The systematic name assigned to a chemical substance based on the rules established by the International Union of Pure and Applied Chemistry (IUPAC).

Cycloalkane

A type of hydrocarbon with a cyclic structure and single bonds, characterized by a formula CnH2n for molecules without rings or branches.

Monocyclic Alkane

A type of alkane that consists of a single ring of carbon atoms.

Carbon Atoms

The fundamental building blocks of organic chemistry, with the atomic number 6, capable of forming a vast array of compounds, polymers, and structures.