If a Parent Company Owns 80% of a Subsidiary Company

question 55

Multiple Choice

If a parent company owns 80% of a subsidiary company, which of the following best describes how the assets and liabilities of the combined entity are valued on the consolidated financial statements?

• A)All at fair value.
• B)All at historical cost.
• C)The parent at its book value and the subsidiary at its fair value.
• D)The parent at its book value and the subsidiary's at a combination of historical cost and book value.

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