subsidiary company s had the following stockholders equity on january 1 2014 prior t 4374479

Subsidiary Company S had the following stockholders’ equity on January 1, 2014, prior to issuing 5,000 additional new shares: Common stock ($1par), 100,000 shares issued and outstanding …….. $ 100,000 Paid-in capital in excess of par ………………… 1,900,000 Retained earnings …………………… 2,000,000 Total equity ………………………. $4,000,000 Prior to the sale of additional shares, the parent owned 90,000 shares. Assume that the parent acquired the shares at a price equal to their book value. Assume that the new shares are sold for $45 each. Describe the general impact (no calculations required) the sale will have on the parent’s investment account if: a. The parent buys less than 90% of the new shares. b. The parent buys 90% of the new shares. c. The parent buys all the new shares. View Solution:
Subsidiary Company S had the following stockholders equity on January

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