A New Subsidiary Is Being Formed

question 2

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 $18 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:

Explicit

Referring to knowledge or information that is fully and clearly expressed or demonstrated, leaving no room for confusion or doubt.

External

Relating to, situated on, or connected with the outside or an outer part.

Orbital Frontal Cortex

A region of the brain located in the frontal lobes that is involved in the complex process of decision making and moderating social behavior.

Ventromedial Cortex

A region of the brain associated with decision-making, emotional responses, and the processing of reward and fear.