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Concept Introduction:
The various terms are used here.
The terms that are used here are
a. Subsidiary
A subsidiary is the company whose shares are bought by another company. But the purchasing company must buy shares more than 50% of ownership.
b. Parent
A parent company is the company shares of the other company more than 50% of ownership. The company whose shares are bought by another company is treated as subsidiary.
c. Controlling
When a company purchases an investment ranging from 20 % to 50 % of ownership and that gives a significant control to the investor over the investee.
When a company has significant control over the other company in case, it is treated as controlling company.
The mentioned terms have been discussed.
To complete:
The descriptions by filling in the blanks using the terms given.
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Chapter 15 Solutions
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
- What was the amount of consulting services providedarrow_forwardfinancial accountingarrow_forwardAt the end of last year, Harvey, a 25% partner in the four-person HRT partnership, had an outside basis of $28,000, which included his $12,000 share of HRT's debt. On January 1 of the current year, Harvey sells his partnership interest to Samuel for a cash payment of $20,000 and the assumption of his share of HRT's debt. HRT has no hot assets. What is the amount and character of Harvey’s recognized gain or loss on the sale? A. $4,000 capital loss B. $4,000 ordinary loss C. $4,000 capital gain D. $8,000 ordinary incomearrow_forward
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