Ryan Company Owns 80% of Chase Company Assume Chase Issues 30,000 Additional Shares Common Stock Solely to Presented

question 87

Multiple Choice

Ryan Company owns 80% of Chase Company. The original balances presented for Ryan and Chase as of January 1, 2011, are as follows: $\begin{array}{l}\text { Chase Company: }\\\begin{array}{lr}\text { Shares outstanding } & 50,000 \\\text { Book value } & \$ 400,000 \\\text { Book value per share } & \$ 8\\\\\text { Ryan Company: }\\\text { Shares owned of Chase } & 40,000 \\\text { Book value of investment in Chase } & \$ 320,000\end{array}\end{array}$ Assume Chase issues 30,000 additional shares common stock solely to Ryan for $12 per share.
-After acquiring the additional shares, what adjustment is needed for Ryan's investment in Chase account?

• A) $70,000 increase.
• B) $70,000 decrease.
• C) $15,000 increase.
• D) $15,000 decrease.
• E) No adjustment is necessary.

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Definitions:

Medical Treatments

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The technique of using genetically modified plants or animals to produce pharmaceutical substances.

Transgenic Farm Animals

Animals that have had their genomes altered by the introduction of genetic material from other species, typically for improving traits such as growth rate, disease resistance, or productivity.

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