For each of the situation below, determine if the investment should be reported as a passive investment
Question:
For each of the situation below, determine if the investment should be reported as a passive investment (P), an investment reflecting influence (SI), or a controlling interest (C).
a. ___ Griffin Company purchased 25% of the common stock of Wright, Inc., Griffin is one of several suppliers that Wright, Inc., relies on to supply subcomponents.
b. ___ Dye Corporation purchased 20% of the 2016 $40 miIlion bond issue offered by Glover Company.
c. ___ Zhao, Inc., purchased 2,000 shares of Alphabet, Inc., common stock, paying $1.1 million.
d. ___ Watts Corporation purchased 65% of the common stock of Zimmerman, Inc., common stock for cash. Watts and Zimmerman had been engaged in several strategic alliances prior to the purchase.
e. ___ Shevlin, Inc., purchased 15% o f Bowen Company's common stock. Shevlin is Bowen Company's largest customer, buying more than 60% of its output.
Step by Step Answer:
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman