Webb Company Owns 90% of Jones Company

Multiple Choice

Webb Company owns 90% of Jones Company. The original balances presented for Jones and Webb as of January 1, 2011, are as follows:

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?

A) $200,000.
B) $1,400,000.
C) $1,280,000.
D) $1,050,000.
E) $1,440,000.