A New Subsidiary Is Being Formed

question 38

Multiple Choice

A new subsidiary is being formed.The parent company purchased 70% of the shares for $20 per share.The remaining shares were sold to a variety of outside interests for an average of $22 per share.The consolidated statements will show

• A)​a gain.
• B)​a loss.
• C)​only cash and related equity.
• D)​goodwill.

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Definitions:

Natural Rubber

A polymer of isoprene, occurring naturally and used to make various elastic materials.

Polypropylene

A thermoplastic polymer used in a wide variety of applications, known for its resistance to chemicals and ability to be molded.

Stereochemistry

The study of the three-dimensional arrangement of atoms in molecules and the effect of this arrangement on chemical reactions and properties.

Methyl Substituents

Groups of atoms, specifically a carbon atom bonded to three hydrogen atoms (-CH3), attached to various molecules, impacting their physical and chemical properties.