On December 31, 2010, Giant Corporation's Investment in Penguin Corporation account had a balance of $500,000. The
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Question:
On December 31, 2010, Giant Corporation's Investment in Penguin Corporation account had a balance of $500,000. The balance consisted of 80% of Penguin's $625,000 stockholders' equity on that date. Giant owns 80% of Penguin. On January 2, 2011, Penguin increased its outstanding common stock from 15,000 to 18,000 shares.
Assume that Penguin sold the additional 3,000 shares directly to Giant for $150,000 on January 2, 2011. Giant's percentage ownership in Penguin immediately after the purchase of the additional stock is
A) 66 -2/3%.
B) 80%.
C) 83 - 1/3%.
D) 86 - 2/3%
Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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