A Parent Company Owns a 100% Interest in a Subsidiary

question 38

Multiple Choice

A parent company owns a 100% interest in a subsidiary.Recently, the subsidiary paid a 10% stock dividend.The dividend should be recorded on the books of the parent

• A)​at the par value or stated value of the shares received.
• B)​at the market value of the shares on the date of declaration.
• C)​at the market value of the shares on the date of distribution.
• D)​merely as a memo entry indicating that the cost of the original investment now is allocated to a greater number of shares.

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