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Apple Corporation owns 60,000 shares of common stock out of the 100,000 shares outstanding of...

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Accounting

Apple Corporation owns 60,000 shares of common stock out of the 100,000 shares outstanding of common stock of Orange Corporation. On 1/1/2012, using the equity method, Apple recorded its investment in Orange on its book at $480,000. The book value of net assets of Orange Corporation on 1/1/2012 was $800,000.

If on 1/2/2012 Orange Corporation repurchased 20,000 shares from outsiders at $6 a share, what would be Apple ownership percentage in Orange after the repurchase?

A.50%

B.60%

C.75%

D.80%

E.None of the answers is correct

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