If a parent company acquires additional shares of its subsidiary's stock directly from the subsidiary for a price less than their book value:
A) total noncontrolling book value interest increases.
B) the controlling book value interest increases.
C) the controlling book value interest decreases.
D) total noncontrolling book value interest increases; and the controlling book value interest decreases.

Question

Quizplus · Accepted Answer

When a parent company acquires additional shares of its subsidiary's stock directly from the subsidiary for a price less than their book value, the controlling book value interest increases because the parent company now owns a greater portion of the subsidiary. This transaction does not affect the noncontrolling interest's book value directly.

If a Parent Company Acquires Additional Shares of Its Subsidiary's