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A Parent company owns a 70 percent controlling interest in the voting common stock of its Subsidiary. The subsidiary also has outstanding 10,000 shares of

A Parent company owns a 70 percent controlling interest in the voting common stock of its Subsidiary. The subsidiary also has outstanding 10,000 shares of 3% cumulative preferred stock outstanding with par value equal to $5,000,000. If the parent company owns none of the preferred stock, how should the preferred stock be accounted for in the consolidation financial statement?

How would your answer change if the parent company owned 100 percent of the preferred stock?

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