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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%

Question

Quizplus · Accepted Answer

C)(Parent had 80% of 15,000 shares,or 12,000 shares.They now hold 15,000 of 18,000 shares)= 83.33%

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