A Parent Acquires All of a Subsidiary's Common Stock and 60

question 82

Multiple Choice

A parent acquires all of a subsidiary's common stock and 60 percent of its preferred stock. The preferred stock has a cumulative dividend. No dividends are in arrears. How is the non-controlling interest in the subsidiary's net income assigned?

• A) Income is assigned as 40 percent of the value of the preferred stock, based on an allocation between common stock and preferred stock.
• B) There is no allocation to the non-controlling interest because the parent owns 100% of the common stock and net income belongs to the residual owners.
• C) Income is assigned as 40 percent of the preferred stock dividends.
• D) Income is assigned as 40 percent of the subsidiary's income before preferred stock dividends.
• E) Income is assigned as 40 percent of the subsidiary's income after subtracting preferred stock dividends.

Comprehend the significance of transaction processing systems and how they support the daily operations of a business.

Grasp the importance of ensuring data quality through various data checks (alphabetic, numeric, completeness, consistency, range) in database systems.

Recognize the utility of providing decision-makers with timely and accurate information through specific types of information systems.

Understand the concepts of real-time and batch processing and their respective advantages for different business needs.

---

Definitions:

Straight Ranking

A method of employee evaluation where individuals are ranked in order from best to worst based on specific criteria or overall performance.

Management by Objectives

A strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed upon by both management and employees.

Direct Index Approach

A method used in finance to directly compare the performance of various investments or securities to a specific market index.

Results Based-Format

an approach focusing on outcomes and results in the context of performance assessments or project management.