Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000.
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Question:
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. Jones sells 20,000 shares of previously unissued shares of its common stock to outside parties for $10 per share.
What is the adjusted book value of Jones after the sale of the shares?
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