In the following independent situations, discuss and determine whether a parentsubsidiary relationship exists, and which entity, if any, is a parent. You must fully explain and support your answer. This includes identifying and discussing each of the important facts or considerations in each case.

(a). Tom Ltd is a company that was hurt by a major downturn in the economy. It previously obtained a significant loan from Jenson Bank, and when Tom Ltd was unable to make its loan repayments, the bank made an agreement with Tom Ltd to become involved in the management of that company. Under the agreement between the two entities, Tom Ltd.s managers had to obtain authority from the bank for acquisitions over $10 000 and were required to have bank approval for the companys budgets.

(b) Sawyer Ltd is a major financing company whose interest in investing is return on the investment. Sawyer Ltd does not get involved in the management of its investments. If an investee is not managed properly, Sawyer Ltd sells its shares in that investee and selects a more profitable investee to invest in. It previously held a 35% interest in Anderson Ltd as well as providing substantial convertible debt finance to that entity. Recently, Anderson Ltd was having cash flow difficulties and persuaded Sawyer Ltd to convert some of the convertible debt into equity so as to ease the effects of interest payments on cash flow. As a result, Sawyer Ltds equity interest in Anderson Ltd increased to 52%. Sawyer Ltd still wanted to remain as a passive investor, with no changes in the directors on the board of Anderson Ltd. These directors were appointed by the holders of the 48% of shares not held by Sawyer Ltd.

(c) Penny Ltd has recently acquired a 35% interest in Leonard Ltd, a company that has discovered large deposits of iron ore. Penny Ltd has extensive experience in the mining industry and, as a result, has been able to have four of its directors elected to the board of Leonard Ltd, which has six directors in total.