A controlling interest in a company implies that the parent companya.owns all of the subsidiary's stock.b.has acquired a majority of the subsidiary's common stock.c.has paid cash for a majority of the subsidiary's stock.d.has transferred common stock for a majority of the subsidiary's outstanding bonds and debentures.

Answered: hat the paren

Business

Accounting

hat the paren

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A controlling interest in a company implies that the parent company

a.	owns all of the subsidiary's stock.
b.	has acquired a majority of the subsidiary's common stock.
c.	has paid cash for a majority of the subsidiary's stock.
d.	has transferred common stock for a majority of the subsidiary's outstanding bonds and debentures.

Expert Solution

Step 1

A consolidated financial statement is inclusive of all the subsidiary companies where the owner has a controlling interest and the subsidiaries which are wholly owned.

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