Parent Corporation Owns 70% of Sam Corporation's Single Class of Stock

question 6

Multiple Choice

Parent Corporation owns 70% of Sam Corporation's single class of stock. This year, Parent Corporation purchases for cash the remaining 30% of Sam Corporation's stock from four individual investors pursuant to a tender offer. A plan of liquidation is approved by Sam Corporation's shareholders during the last month of this year, and Sam Corporation's assets are distributed by year- end to Parent Corporation in exchange for all of Sam's outstanding stock. Parent Corporation should

• A) recognize losses but not gains on the redemption.
• B) not recognize any gains and losses on the redemption.
• C) recognize gains but not losses on the redemption.
• D) recognize gains and losses on the redemption.

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Definitions:

Substance Abuse

The detrimental or dangerous consumption of mind-altering substances, such as alcohol and illegal drugs, resulting in addiction or dependence.

Authoritative Parents

A parenting style characterized by high demands and high responsiveness, where parents set clear standards but also show empathy and support towards their child.

School Phobia

An intense fear of going to school, which can result in physical symptoms and significant distress, often linked to emotional issues like anxiety.

Antidepressant Medication

involves drugs prescribed to alleviate symptoms of depression by adjusting chemical imbalances in the brain.