Pocket Corporation Acquired 100 Percent of the Voting Shares of Sleeve

question 38

Essay

Pocket Corporation acquired 100 percent of the voting shares of Sleeve Inc.by issuing 10,000 new shares of $5 par value common stock with a $30 market value.
Required:
1.Which company is the parent and which is the subsidiary?
2.Define a subsidiary corporation.
3.Define a parent corporation.
4.Which entity prepares the consolidated worksheet?
5.Why are consolidation entries used?

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Definitions:

Telephone Consumer Protection Act

A law enacted in 1991 in the United States that restricts telemarketing and the use of automated telephone equipment.

Telephone Solicitation

The practice of contacting individuals by phone to promote services or products, often unsolicited.

Limited Check

A check that is void after a certain time limit; commonly used for payroll.

Time Limit

Time Limit refers to a fixed or set duration within which an action, process, or procedure is to be completed or accomplished.