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

A) $180,000 increase.
B) $180,000 decrease.
C) $30,000 increase.
D) $30,000 decrease.
E) No adjustment is necessary.