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.

After acquiring the additional shares, what adjustment is needed for Webb's investment in Jones account?

Multiple Choice

• No adjustment is necessary.

• $30,000 decrease.

• $270,000 increase.

• $30,000 increase.

• $270,000 decrease.