A Company Owning a Majority (But Less Than 100%) of Another

question 7

Multiple Choice

A company owning a majority (but less than 100%) of another company's voting shares on the date of acquisition should account for its subsidiary (in its consolidated balance sheet) :

• A) by including only its share of the fair market values of the subsidiary's net assets.
• B) by including only its share of the book values of the subsidiary's net assets.
• C) by including 100% of the fair market values of the subsidiary's net assets.
• D)by including 100% of the fair market values of the subsidiary's net assets and accounting for any unowned portion of the subsidiary's voting shares using the non-controlling interest (NCI) account.

---

Definitions:

Conformational Isomers

Molecules that have the same molecular formula and sequence of bonded atoms (constitution), but differ in the three-dimensional orientations of their atoms in space due to rotation around a single bond.

Structural Isomers

Molecules that have the same molecular formula but differ in the connectivity of their atoms.

Isomers

Compounds with the same molecular formula but different structures or spatial arrangements of atoms.

Newman Projection

A method of drawing a molecule to visualize the conformational relationship between different atoms or groups in terms of their spatial orientation, usually focusing on carbon-carbon bonds.