Chapter 10, Problem 6QC

To determine

Controlling Interest Investments:

Controlling interest investments are the equity securities, where the investor (parent) company holds more than 50% of the voting stock of the investee (subsidiary) company. These investments are reported in the consolidated financial statements of the parent company by consolidating the financial statements of the parent company with the subsidiary companies.

Parent company:

The Company that controls other company or companies is referred to as parent company.

Subsidiary company:

The Company that is controlled by the parent company is referred to as subsidiary company.

To comment: On which of the following option is true.