Question

Best Appliances owns​ 90% of the voting stock of​ Wratchet, Inc. Which of the following is​ true? A. Wratchet would be considered the parent entity. B. Best would be considered the parent entity. C. The financial statements of Best would be consolidated into Wratchet. D. Both a and c are correct.

Answer 1

Answer:

B. Best would be considered the parent entity.

Explanation:

When a company owns another companies stock of 90% or more it would be considered as parent entity. The parent entity can control the the subsidiary. The financial statements will be consolidated into parents companies accounts.