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QUESTION 7 ОООО P Company purchases 87% of the stock of S Company. After the transaction, all of the following are correct ex
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Answer #1
Answer: P has an Investment in S account in the liabilities section of its balance sheet.

Explanation:

P company purchases 87% of the stock of S company. Hence, P company is called as parent company and S company is called as subsidiary or controlled company. P has a controlling interest in S. Because, P company purchased more than 50% of the shares of S company and S is a subsidiary of P. P has an Investment in S account in the assets section of its balance sheet and not in the liabilities section of its balance sheet.

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