Ryan Company purchased 80% of Chase Company for $270,000 when Chase's book value was $300,000. Ryan paid no premium. Chase has 50,000 shares outstanding and currently has a book value of $400,000.Assume Chase issues 30,000 additional shares common stock solely to Ryan for $12 per share.After acquiring the additional shares, what adjustment is needed for Ryan's investment in Chase account?
A. $12,188 increase.
B. $70,000 decrease.
C. No adjustment is necessary.
D. $70,000 increase.
E. $12,188 decrease.
Answer: A
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