Question
On January 1, 2020, XYZ, Inc. acquired 100% of the voting shares of ABC, Inc. for $1,000,000. As of December 31, 2020, the market value
On January 1, 2020, XYZ, Inc. acquired 100% of the voting shares of ABC, Inc. for $1,000,000. As of December 31, 2020, the market value of the shares was $1,450,000. XYZ purchased this investment with the goal of holding it indefinitely. Which of the following statements is true regarding the investment and financial statements of XYZ?
Select one:
to. This investment requires the financial statements of XYZ and ABC to be consolidated and the investment account does not appear on the Statement of Financial Position.
b. This investment requires the financial statements of ABC and XYZ to be consolidated, and the investment account is reported as a long-term asset in the Consolidated Statement of Position.
c. On XYZ's unconsolidated books, the investment is classified as Available for sale.
d. On XYZ's unconsolidated books, the investment is reported at amortized cost.
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