When a Parent Sells Its Subsidiary Interest, a Gain (Loss)

question 20

Short Answer

When a parent sells its subsidiary interest, a gain (loss) is recognized if the parent ?
$\begin{array}{l}&\text { sells its } &\text{ sells part but } &\text{ sells part and }\\& \text { entire investment } &\text { retains control} &\text { loses control } \\\end{array}$
A) $\begin{array}{l}&&&\text {Yes } &&&&& & \text { Yes } &&&&& \text { No } \\\end{array}$
B) $\begin{array}{l}&&&\text {Yes } &&&&&& & \text { No } &&&& \text { Yes } \\\end{array}$
C) $\begin{array}{l}&&&\text {No } &&&&&& & \text { No }&&&& & \text { No } \\\end{array}$
D) $\begin{array}{l}&&&\text {No } &&&&&& & \text { No } &&&&& \text { Yes }\end{array}$

• A)\(\begin{array}{l}&&&\text {Yes } &&&&& & \text { Yes } &&&&& \text { No } \\\end{array}\)
• B)\(\begin{array}{l}&&&\text {Yes } &&&&&& & \text { No } &&&& \text { Yes } \\\end{array}\)
• C)\(\begin{array}{l}&&&\text {No } &&&&&& & \text { No }&&&& & \text { No } \\\end{array}\)
• D)\(\begin{array}{l}&&&\text {No } &&&&&& & \text { No } &&&&& \text { Yes }
• \end{array}\)

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Definitions:

Point Source Pollution

Pollution that originates from a single, identifiable source or location, such as a pipe, ditch, ship, or factory smokestack.

Nonpoint Source Pollution

Pollution that does not originate from a single, identifiable source, but rather comes from many diffuse sources, such as agricultural runoff or automobile exhaust.

Agricultural Runoff

Water that leaves farm fields as a result of irrigation, containing pesticides, soil particles, and nutrients, potentially polluting nearby water bodies.

Urban Runoff

Water from rain or melting snow that flows over city streets and other urban surfaces, accumulating pollutants and carrying them into the sewer systems or natural waterways.