Pallet Corporation Owns 80% of Adelt Corporation and Adelt Owns

question 8

Multiple Choice

Pallet Corporation owns 80% of Adelt Corporation and Adelt owns 60% of Bajo Inc.Which of the following is correct?

• A)Bajo should not be consolidated because noncontrolling interests hold 52%.
• B)Bajo should be consolidated because the 60% of Bajo stock is held in the affiliate structure.
• C)Pallet has 8% indirect ownership of Bajo.
• D)Pallet has 80% indirect ownership of Bajo.

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Definitions:

Revenue Variance

The difference between actual revenue earned and the expected or budgeted revenue, indicating performance relative to financial projections.

Medical Supplies

Items used in healthcare settings for treatment, diagnosis, or preventive measures, including equipment and consumable goods.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, making it more useful for management control.

Equipment Depreciation

The allocation of the cost of tangible assets over their useful lives, reflecting the reduction in value due to wear and usage.