Webb Company Purchased 90% of Jones Company for $990,000 When

Multiple Choice

Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000. 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 new percent ownership of Webb in Jones after the stock issuance?

A) 75%.
B) 90%.
C) 80%.
D) 64%.
E) 60%.