XYZ Inc Owns 55% of DEF's 100,000 Outstanding Voting Shares

question 53

Multiple Choice

XYZ Inc. owns 55% of DEF's 100,000 outstanding voting shares. Another company, GHI Inc., owns 40%, with the remaining shares being held by many individual investors. GHI Inc. also owns $25,000,000 worth of DEF Inc.'s $1,000 par value bonds, each of which is convertible to one voting share of DEF Inc. Which of the following statements regarding the control of DEF Inc. is correct?

• A) XYZ Inc. has control over DEF Inc. as it owns a majority of the latter's currently outstanding voting shares.
• B) XYZ Inc. does not have control over DEF Inc., as it cannot exercise control over DEF's strategic operating, investing and Financing activities without the cooperation of GHI Inc.
• C) XYZ Inc. has de facto control over DEF Inc.
• D) As long as GHI Inc. does not exercise its option to convert its bonds to voting shares, XYZ Inc. has control over DEF Inc.

Identify the role of inventory in the cost of goods sold calculation and its impact on net income.

Distinguish between cost terminology used in different types of businesses (manufacturing, merchandising, service).

Understand the structure and components of financial statements.

Analyze changes in assets, liabilities, and equity through comparative balance sheets.

---

Definitions:

Institute for Safe Medication Practices

An independent, nonprofit organization devoted to preventing medication errors and promoting safe medication use.

Point of Care

Involves medical testing or treatment provided at the time and location of patient care, enhancing decision-making and outcomes.

Systems Level

An analysis or intervention made considering the entire system rather than individual components.

Fall Prevention

Strategies and measures implemented to reduce the risk of falls, especially in older adults or those with mobility issues.