Ryan Company purchased 80% of Chase Company for $240,000 when Chase's book value was $300,000. Chase has 50,000 shares outstanding and currently has a book value of $400,000.Assume Chase reacquired 8,000 shares of its common stock from outsiders at $10 per share.What is Ryan's percent ownership in Chase after the acquisition of the treasury shares (rounded)?
A) 80%.
B) 95%.
C) 64%.
D) 76%.
E) 69%.

Question

Quizplus · Accepted Answer

After Chase reacquires 8,000 shares, the total outstanding shares become 42,000 (50,000 - 8,000). Ryan owns 40,000 shares (80% of 50,000). Ryan's ownership percentage is now 40,000/42,000 = 95.24%, rounded to 95%.

Ryan Company Purchased 80% of Chase Company for $240,000 When