Ryan Company owns 80% of Chase Company. The original balances presented for Ryan and Chase as of January 1, 2013 are as follows: Assume Chase reacquired 8,000 shares of its common stock from outsiders at $10 per share.
What should the adjusted book value of Chase be after the treasury shares were purchased?
A) $400,000.
B) $480,000.
C) $320,000.
D) $336,000.
E) $464,000.

Question

Ryan Company owns 80% of Chase Company. The original balances presented for Ryan and Chase as of January 1, 2013 are as follows:  Assume Chase reacquired 8,000 shares of its common stock from outsiders at $10 per share.
What should the adjusted book value of Chase be after the treasury shares were purchased?
A) $400,000. 
B) $480,000. 
C) $320,000. 
D) $336,000. 
E) $464,000.

Quizplus · Accepted Answer

Sub BV before Stock Repurchase $400,000 - Stock Repurchase $80,000 (8,000 × $10) = Sub BV after Stock Repurchase $320,000

Ryan Company Owns 80% of Chase Company