Company P Owns 80% of the 10,000 Outstanding Common Stock

question 25

Multiple Choice

Company P owns 80% of the 10,000 outstanding common stock of Company S.If Company S issues 2,500 added shares of common stock, and Company P purchases some of the newly issued shares, which of the following statements is true?

• A)​Other than recording the purchase, there is no adjustment to the controlling interest if the parent purchases all the shares issued.
• B)​Other than recording the purchase, there is no adjustment to the controlling interest if the parent does not purchase any of the shares issued.
• C)​Other than recording the purchase, there is no adjustment to the controlling interest if the parent purchases 80% of the shares issued.
• D)There is a new excess of cost over book value or excess of book value over cost if the parent purchases 80% of the newly issued shares.

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Definitions:

Observational

Pertaining to research methods that involve watching and recording behaviors or outcomes in their natural setting without manipulation.

Nested Case-Control

A study design used within a cohort study, where a subset of participants with a specific outcome is compared to a subset without the outcome from the same cohort.

Recall Bias

A systematic error caused by differences in the accuracy or completeness of the recollections retrieved by study participants.

Economical

Related to economics or economy, often used to describe something that is cost-effective or does not waste resources.