Assume that the parent reduces its percentage ownership in the subsidiary from 80% to 70% by selling
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Assume that the parent reduces its percentage ownership in the subsidiary from 80% to 70% by selling some shares to outsiders for more than the carrying amount of the shares. How will this transaction affect the return on equity and the debt-to-equity ratios on the consolidated financial statements?
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Since the parent retains control of the subsidiary the gain on sale is reported in contr...View the full answer
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Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781260881295
10th Edition
Authors: Hilton Murray, Herauf Darrell
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