Pete Inc. purchased 80% of Paul Co. for $270,000 when Paul's book value was $300,000. Paul has 50,000 shares outstanding and currently has a book value of $400,000. Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per share. What is the adjusted book value of Paul Co. after the issuance of the shares? $608,000. O $720,000. $680,000. $760,000. $400,000

Pete Inc. purchased 80% of Paul Co. for $270,000 when Paul's book value was $300,000. Paul has 50,000 shares outstanding and currently has a book value of $400,000. Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per share. What is the adjusted book value of Paul Co. after the issuance of the shares? $608,000. O $720,000. $680,000. $760,000. $400,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Pete Inc. purchased 80% of Paul Co. for $270,000 when Paul's book value was $300,000.
Paul has 50,000 shares outstanding and currently has a book value of $400,000.
Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per
share.
What is the adjusted book value of Paul Co. after the issuance of the shares?
$608,000.
O $720,000.
$680,000.
$760,000.
$400,000

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