Question
Accounting Company P holds 900 shares of the 1,000 outstanding common shares of Company S. Today, Company S issues to non-parent investors 500 shares of
Accounting Company P holds 900 shares of the 1,000 outstanding common shares of Company S. Today, Company S issues to non-parent investors 500 shares of common stock for $2,000 in cash. Right before the equity carve-out,
Company S's book value of net assets was $5,000. Assume that the companies were not involved in any intercompany transactions and all the AAP initially recognized was fully amortized. Does Company P retain control after the transaction? Use the information in the previous question.
What effect will this issuance of common stock by Company S have on noncontrolling interest reported on the consolidated financial statements by Company p?
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Before right issue Right issue After right issue Company P holdings 900 90...
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Advanced Accounting
Authors: Debra C. Jeter, Paul Chaney
5th Edition
1118022297, 9781118214169, 9781118022290, 1118214161, 978-1118098615
