Utah Company Holds 80% of the Stock of a Subsidiary

question 32

Multiple Choice

Utah Company holds 80% of the stock of a subsidiary company.The subsidiary issues 100 additional shares of stock to Utah Company at a price above book value per share.The subsidiary does not issue any additional shares at the same time.How will Utah Company record the purchase?

• A)Utah Company records a gain on sale of stock.
• B)Utah Company increases additional paid-in capital.
• C)Utah Company decreases additional paid-in capital.
• D)Utah Company assigns any excess cost over book value acquired to increase undervalued identifiable assets or goodwill as appropriate.

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Definitions:

Exploitation

The act of taking unfair advantage of people or resources for one's own benefit, often by imposing unequal exchanges, labor, or conditions.

Social Inequality

The unequal distribution of resources, opportunities, and privileges among people in a society, often based on factors like class, race, or gender.

Contraception Education

Instruction and information regarding various methods to prevent pregnancy, aimed at helping individuals make informed reproductive choices.

Inadequate Medical Care

Health care services that fail to meet basic standards of quality and accessibility for the treatment of medical conditions.