Calendar Year Parent Corporation Acquired All of the Stock of SubCo

question 11

Essay

Calendar year Parent Corporation acquired all of the stock of SubCo on January 1, Year 1, for $500,000. The subsidiary's operating gains and losses are shown below. In addition, a $50,000 dividend is paid early in Year 2.
Complete the following chart, indicating the appropriate stock basis and excess loss account amounts. $\begin{array}{llll}&&& \text { Excess } \\& \text { Operating } & \text { Stock } & \text { Loss } \\\text { Year } & \text { Gain } / \text { Loss } & \text { Basis } & \text { Account }\\1 & (\$ 100,000) & ? & ? \\2 & (\$ 150,000) & ? & ? \\3 & \$ 300,000 & ? & ?\end{array}$

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Definitions:

Environmental Ambiance

The overall atmosphere or mood created by a particular environment, influenced by factors such as design, lighting, and sound.

Activation

In psychology, the process of stimulating activity in the brain, influencing mental and physical functions.

Deactivation

The process of turning off, disabling, or removing the active status of a system, device, or substance.

Restorative Place

An environment or setting that promotes recovery from stress and fatigue, often through elements of nature and peaceful settings.