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economic activities of the variable-interest entity. II. Only one
entity can be the primary beneficiary of a variable-interest entity.
III. The investor that has the greatest equity ownership in a
variable-interest entity will be the primary beneficiary of the
entity.
Question 14
Sun Co. is a wholly owned subsidiary of Star Co. Both companies
have separate general ledgers, and prepare separate financial
statements. Sun requires stand-alone financial statements. Which
of the following statements is correct?
Question 15
P Co. purchased term bonds at a premium on the open market.
These bonds represented 20 percent of the outstanding class of
bonds issued at a discount by S Co., P's wholly owned subsidiary.
P intends to hold the bonds until maturity. In a consolidated
balance sheet, the difference between the bond carrying amounts
in the two companies would be
Question 16
In which of the following circumstances of a business
combination, if any, could the recognition of a gain occur at the
time of the combination?
Question 17
Aceco has significant investments in three separate entities. These
investments are: Which of Aceco's investments would be
consolidated with Aceco in its consolidated financial statements?
Question 18