A parent company owns a 70 percent interest in a subsidiary whose stock has a valuation basis of $27 per share.On the last day of the year, the subsidiary issues new shares for $27 per share, and the parent buys its 70 percent interest in the new shares.Which of the following statements is true?
A) Since the sale was made at the end of the year, the parent’s investment account is not affected.
B) Since the shares were sold for the same per share amount as the the adjusted subsidiary value per share, the parent’s investment account must be increased.
C) Since the shares were sold for the same per share amount as the the adjusted subsidiary value per share, the parent’s investment account must be decreased.
D) Since the shares were sold for the same per share amount as the the adjusted subsidiary value per share, and the parent bought 70 percent of the shares, the parent’s investment account is not affected except for the total acquisition amount for the new shares.
E) None of these answer choices are correct.
A parent company owns a controlling interest in a subsidiary whose stock has a valuation basis of $27 per share.On the last day of the year, the subsidiary issues new
A parent company owns a controlling interest in a subsidiary whose stock has a valuation basis of $27 per share.On the last day of the year, the subsidiary issues new shares entirely to outside parties at $25 per share.The parent still holds control over the subsidiary.Which of the following statements is true?
A) Since the sale was made at the end of the year, the parent’s investment account is not affected.
B) Since the shares were sold for less than the adjusted subsidiary value per share, the parent’s investment account must be increased.
C) Since the shares were sold for less than the adjusted subsidiary value per share, the parent’s investment account must be decreased.
D) Since the shares were sold for less than the adjusted subsidiary value per share, but the parent did not buy any of the shares, the parent’s investment account is not affected.
E) None of these answer choices are correct.
Two recent studies conclude that increased fibre in the diet does not reduce the risk of developing colon cancer.The likely result will be that the
Two recent studies conclude that increased fibre in the diet does not reduce the risk of developing colon cancer.The likely result will be that the
A) quantity of fibre supplements demanded will fall.
B) demand for fibre supplements will decrease.
C) supply of fibre supplements will increase.
D) price of fibre supplements will rise.
E) market for fibre supplements will be unaffected.
In a multiple regression model,which of the following is true?
In a multiple regression model,which of the following is true?
A)The coefficient of determination will be equal to the square of the highest correlation in the correlation matrix.
B)Adding variables that have a low correlation with the dependent variable will cause the R-square value to decline.
C)The sum of the residuals computed for the least squares regression equation will be zero.
D)The adjusted R-square might be higher or lower than the value of the R-square.
Guaranteed payments are not deductible by the partnership in arriving at partnership ordinary income but are included in the receiving partner’s income.
Guaranteed payments are not deductible by the partnership in arriving at partnership ordinary income but are included in the receiving partner’s income.