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  3. a parent acquires all of the stock of a subsidiary

A parent acquires all of the stock of a subsidiary for $50 million in cash....

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Accounting

A parent acquires all of the stock of a subsidiary for $50 million in cash. The fair value of the subsidiarys identifiable net assets is $55 million. On its own books, the parent reports

Select one:

a. its investment at a balance of $55 million, with a contra asset allowance of $5 million.

b. its investment at a balance of $50 million.

c. a gain of $5 million in income.

d. a gain of $5 million in other comprehensive income.

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