Target Company's Share Capital Consists of Class a Common Shares-Unlimited

question 47

Multiple Choice

Target Company's share capital consists of Class A common shares-unlimited authorized, 100,000 outstanding, 1 vote per share and Class B common shares- 100,000 authorized, 90,000 outstanding, 2 votes per share.If Parent Company bought 75,000 Class A shares, how should they account for their investment in Target Company?

• A)Consolidation method
• B)Equity method
• C)Cost method
• D)Fair value method

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Definitions:

AC Voltage

AC voltage stands for alternating current voltage, where the flow of electric charge periodically reverses direction, commonly used in homes and industries for powering electrical appliances.

Reluctor

A term used to describe a number of devices that use magnetism and motion to produce voltage.

Series Circuit

An electrical circuit in which components are arranged in a single path, so current flows through one component to get to the next.

Voltage Drop

The decrease in electrical potential along the path of a current flowing in an electrical circuit, affecting the circuit's performance.