Parker Owned All of Odom Inc

question 27

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, 2013, 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 $141,120.
• B) It should be increased by $176,400.
• C) It should be increased by $48,000.
• D) It should be decreased by $128,400.
• E) It is not affected since the shares were sold to outside parties.

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