Ryan Company purchased 80% of Chase Company for $270,000 when Chase's book value was $300,000. Ryan paid no premium. 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 acquiring the additional shares, what adjustment is needed for Ryan's investment in Chase account? No adjustment is necessary. $70,000 increase. $12,188 increase. $12,188 decrease. $70,000 decrease.

Ryan Company purchased 80% of Chase Company for $270,000 when Chase's book value was $300,000. Ryan paid no premium. 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 acquiring the additional shares, what adjustment is needed for Ryan's investment in Chase account? No adjustment is necessary. $70,000 increase. $12,188 increase. $12,188 decrease. $70,000 decrease.

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

Ryan Company purchased 80% of Chase
Company for $270,000 when Chase's book
value was $300,000. Ryan paid no
premium. 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 acquiring the additional shares, what
adjustment is needed for Ryan's investment
in Chase account?
No adjustment is necessary.
$70,000 increase.
$12,188 increase.
$12,188 decrease.
$70,000 decrease.

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