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 issues 30,000 additional shares common stock solely to Ryan for $12 per share.
What is the adjusted book value of Chase Company after the issuance of the shares?
A) $608,000.
B) $720,000.
C) $680,000.
D) $760,000.
E) $400,000.

Question

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 issues 30,000 additional shares common stock solely to Ryan for $12 per share.
What is the adjusted book value of Chase Company after the issuance of the shares?
A) $608,000. 
B) $720,000. 
C) $680,000. 
D) $760,000. 
E) $400,000.

Quizplus · Accepted Answer

Starting BV $400,000 + Add'l Shares Sold $360,000 ($12 × 30,000) = $760,000 Current BV

Ryan Company Owns 80% of Chase Company