‘An associate is an entity over which the investor has significant influence’ (para 3). Which of the following indicate the presence of significant influence? A. The investor controls the votes of a majority of the board members B. The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor C. The investor owns 330,000 of the 1,500,000 equity voting shares of the investee

‘An associate is an entity over which the investor has significant influence’ (para 3). Which of the following indicate the presence of significant influence? A. The investor controls the votes of a majority of the board members B. The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor C. The investor owns 330,000 of the 1,500,000 equity voting shares of the investee

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 3MC: Your friend is considering incorporating and asks for advice. Which of the following is not a major...

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An associate is an entity in which an investor has significant influence over the investee. Which the following indicate the presence of significant influence? (I) The investor owns 660,000 of the 3,000,000 equity voting shares of the investee. (II) The investor has representation on the board of directors of the investee. (Ill) The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor. (IV) The investor controls the votes of a majority of the board members. Choose one of the correct pair. Please provide your explaination A) (I) , (II) B) (II), (Ill), (IV) C) (I), (III), (IV) D) (I), (II), (III), (IV) E) None of the above.
20) IAS 28 Investment governs the identification of associates. Which of the following is true? Select one: O a. The investing equity owned by its hare since the incorporation of the investee equity O b. The investor holds greater than 20% but less than 50% of the entity power of the investee Oc. The investing entity has some influences over entities in the same industry. Od. The investor often trades with the invest
Under IFRS 10, parent corporation is the entity that controls one or more entities. How does IFRS 10 define control? Choose the best answer A. An investor controls an investee when it owns more than 50% of all the outstanding capital stocks, whether common or preferred. B. An investor controls an investee when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. C. An investor controls an investee when it has the ability to influence the financial and operating policies of an entity so as to obtain benefits from its activities. D. An investor controls an investee when it is exposed, or has the right to variable return from the investment with the investee and has the ability to affect those returns through the power over the investee.
Which of the following represents one of the basic rights of stockholders? a. Stockholders may sell their stock back to the company if they wish. b. Stockholders may authorize a business contract on behalf of the corporation. c. Stockholders may determine at what price the company issues stock. d. Stockholders may participate in management by voting on corporate matters.
When an investor is deemed to have control" over an investee, GAAP requires presentation of consolidated financial statements. Which of the following would not be considered an indicator of control?\\nSelect one:\\nA. The investor owns 40% of the investee's stock and the rest is owned by the investee's founder.\\nB. The investor has majority interest in the investee.\\nC. Instead of owning stock, a company licenses technology to another company in an agreement allowing the licensor to appoint a majority of the licensee's board of directors.\\nD. The investor owns 40% of the Investee's stock and the rest is owned by a large number of small investors.
Write T if the statement is correct and F if the statement is incorrect. On the space provided, explain using the concepts discussed why your answer to a statement is T or F. 1. A person of minor age can be a shareholder but can never be an incorporator in a corporation. 2. A corporation can be an incorporator in another corporation. 3. A share certificate can be issued to those subscribers who partially paid their subscriptions. 4. A corporation or business partnership can be an incorporator but not a corporator. 5. All partnership can be an incorporator in a corporation. 6. On January 10,2021, Ana paid 90% of her subscription in Jollibee Foods Corporation. She will receive her certificate of stock on January 10,2021. 7. Continued inoperation of a corporation for at least 5 consecutive years will result in its certificate of incorporation being deemed revoked. 8. In case of conflict between the by-laws and the corporation code, the code shall prevail.
1.Identify which of these statements regarding real estate limited partnerships (RELPs) and real estate investment trusts (REITs) is CORRECT. One-REITs are generally liquid and actively traded on national and regional stock exchanges, as well as over the counter. Two-A REIT shareholder may sell as few or as many shares as he or she deems appropriate, whereas a RELP investor must generally sell the entire interest.
When an investor owns 20% to 50% of the voting stock of an investee company, the investor is presumed to exercise significant influence over the investee unless there is evidence to the contrary. Describe some factors that could be evidence of significant influence? Describe some factors that could be evidence of a lack of significant influence
All of the following statements are correct, except, An investor may have significant influence even if it has 15% voting power. An investor may not have significant influence even if it has more than 20% voting power. Under the equity method that is used to account for investment in associates, cash dividends are treated as income. Share dividends do not result to a change in the total equity of the investee.
Which among the following form of business organization can issue shares to the general public? a. Partnership firm b. Limited Liability Company c. Public limited company d. Private company
Ownership of shares of share capital entitles the holders to all of the following rights, except: a. To elect the board of directors of the corporation. b. To share in the profits of the corporation. c. To purchase new shares of stock when they are offered for sale. d. To participate in the daily operations of the corporation.
The preemptive right allows common stockholders to: Group of answer choices vote for the board of directors. maintain a proportionate share of ownership in the firm. increase their wealth by selling their rights. preempt the protective covenants of bondholders. convert common shares to preferred shares.