Parker Owned All of Odom Inc

question 39

Multiple Choice

Parker owned all of Odom Inc.Although the Investment in Odom Inc.account had a balance of $834,000, the subsidiary's 12,000 shares had an underlying book value of only $56 per share.On January 1, 2018, Odom issued 3,000 new shares to the public for $70 per share.How does this transaction affect the Investment in Odom Inc.account?

• A) It should be decreased by $210,000.
• B) It should be increased by $210,000.
• C) It should be increased by $168,000.
• D) It should be decreased by $1,200.
• E) It is not affected since the shares were sold to outside parties.

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