Arcola, Incorporated, acquires all 40,000 shares of Tuscola Company for $725,000. A year later, when...
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Arcola, Incorporated, acquires all 40,000 shares of Tuscola Company for $725,000. A year later, when Arcola's equity-adjusted balance in its investment in Tuscola equals $800,000, Tuscola issues an additional 10,000 shares to outside investors for $25 per share. Which of the following best describes the effect of Tuscola's stock issue on Arcola's investment accour Multiple Choice The investment account is increased because Arcola's share of Tuscola's value has increased. There is no effect because Arcola maintains control over Tuscola despite the new stock issue. The investment account is reduced because Arcola now owns a smaller percentage of Tuscola. There is no effect because the shares were all sold to outside parties
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