Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000. There was no premium paid by Webb. Jones currently has 100,000 shares outstanding and a book value of $1,200,000.Assume Jones issues 20,000 new shares of its common stock to outside parties for $15 per share.What is the adjusted book value of Jones after the stock issuance?
A) $1,500,000.
B) $1,200,000.
C) $1,350,000.
D) $1,080,000.
E) $1,335,000.

Question

Quizplus · Accepted Answer

The adjusted book value of Jones after the stock issuance is calculated by adding the proceeds from the new shares to the current book value: $1,200,000 + (20,000 shares * $15) = $1,500,000.

Webb Company Purchased 90% of Jones Company for $990,000 When