Question
Ryan Company purchased 80% of Chase Company for $270,000 when Chases book value was $300,000. Chase has 50,000 shares outstanding and currently has a book
Ryan Company purchased 80% of Chase Company for $270,000 when Chases book value was $300,000. Chase has 50,000 shares outstanding and currently has a book value of $400,000.
Assume Chase issues 30,000 additional shares common stock solely to Ryan for $12 per share.
After recording the acquisition of the additional shares, what adjustment is needed for Ryan's Investment in Chase account?
Multiple Choice
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$12,188 increase.
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$70,000 decrease.
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No adjustment is necessary.
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$12,188 decrease.
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$70,000 increase.
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
14th Edition
978-0132960649, 132960648, 132109174, 978-0132109178
