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If a parent company and outside investors purchase shares of a subsidiary in relation to existing stock ownership (ratably)
Answer
a. there will be no adjustment to additional paid-in capital regards if the stock is sold above or below book value
b. will requirement an investment account adjustment
c. will require the elimination of a gain depending upon whether it was conducted at economic arm's length
d. will require the elimination of a loss depending upon whether it was conducted at economic's arm length

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Accounting Basics, Accounting

Category:- Accounting Basics
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