In which of the following cases would consolidation be inappropriate?
A)The subsidiary is in bankruptcy.
B)Subsidiary's operations are dissimilar from those of the parent.
C)The parent owns 90 percent of the subsidiary's common stock,but all of the subsidiary's nonvoting preferred stock is held by a single investor.
D)Subsidiary is foreign.

Question

Quizplus · Accepted Answer

Consolidation is inappropriate if the subsidiary is in bankruptcy because the parent company does not have control over the subsidiary's financial and operational decisions.

In Which of the Following Cases Would Consolidation Be Inappropriate