Webb Company Owns 90% of Jones Company

question 76

Multiple Choice

Webb Company owns 90% of Jones Company. The original balances presented for Jones and Webb as of January 1, 2011, are as follows:

Jones sells 20,000 shares of previously unissued shares of its common stock to outside parties for $10 per share.

What adjustment is needed for Webb's investment in Jones account?

• A) $180,000 increase.
• B) $180,000 decrease.
• C) $30,000 increase.
• D) $30,000 decrease.
• E) No adjustment is necessary.

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Definitions:

Psychoanalysis

A therapeutic approach developed by Freud, focusing on uncovering unconscious motives and conflicts as a means of understanding and treating psychological disorders.

Systematic Desensitization

A therapeutic technique used to reduce phobia or anxiety through gradual exposure to the feared object or situation alongside relaxation exercises.

Anxiety-Laden Material

Content or information that evokes or is associated with feelings of anxiety or distress.

Psychoanalysis

A therapeutic technique and theory of psychology developed by Sigmund Freud that emphasizes unconscious motives and conflicts as the roots of psychological issues.