Ryan Company Owns 80% of Chase Company

question 107

Multiple Choice

Ryan Company owns 80% of Chase Company. The original balances presented for Ryan and Chase as of January 1, 2013 are as follows: Assume Chase reacquired 8,000 shares of its common stock from outsiders at $10 per share.
When Ryan's new percent ownership is rounded to a whole number, what adjustment is needed for Ryan's investment in Chase account?

• A) $16,000 decrease.
• B) $60,000 decrease.
• C) $64,000 increase.
• D) $64,000 decrease.
• E) No adjustment is necessary.

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Definitions:

Boundary-Spanning Subsystem

Part of an organization that interacts with the external environment, facilitating the input and output transactions between the organization and its external stakeholders.

Technical Subsystems

Components within an organization focused on the technological processes and requirements that support its operations and objectives.

Managerial Subsystems

Components within an organization that are responsible for different management functions, such as planning, organizing, leading, and controlling.

Efficiency

Refers to the ability to achieve a desired result without wasted energy or effort.