Which of the Following Is Correct? the Direct Sale of Additional

question 17

Multiple Choice

Which of the following is correct? The direct sale of additional shares of stock at book value per share to only the parent company from a subsidiary

• A)decreases the parent's interest and decreases the noncontrolling shareholders' interest.
• B)decreases the parent's interest and increases the noncontrolling shareholders' interest.
• C)increases the parent's interest and increases the noncontrolling shareholders' interest.
• D)increases the parent's interest and decreases the noncontrolling shareholders' interest.

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Definitions:

Initial Value Method

A method for investment accounting where the investment is recorded at acquisition cost, with changes in value not usually recorded.

Common Stock

Equity shares representing ownership in a company, granting voting rights and potential dividends.