When a Parent Acquires the Preferred Stock of a Subsidiary,there

question 30

Multiple Choice

When a parent acquires the preferred stock of a subsidiary,there will be a constructive retirement and

• A)any difference paid above the book value of the preferred stock reduces the parent's additional paid-in capital.
• B)any difference paid above the book value of the preferred stock reduces the subsidiary's retained earnings.
• C)any difference paid above the book value of the preferred stock increases the parent's additional paid-in capital.
• D)any difference paid above the book value of the preferred stock increases the parent's retained earnings.

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