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 adjustment is needed for Webb's investment in Jones account?

A) $180,000 increase.
B) $180,000 decrease.
C) $45,000 decrease.
D) $45,000 increase.
E) No adjustment is necessary.