Question

A parent company must prepare consolidated financial statements when a corporation owns more than 50% of...

A parent company must prepare consolidated financial statements

when a corporation owns more than 50% of the common stock of another company

when a corporation owns more than 20% and less than 40% of the common stock of another company

only when a corporation owns 100% of the common stock of another company

whenever the market value of the stock investment is significantly lower than its cost

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Answer #1

Answer: when a corporation owns more than 50% of the common stock of another company

Explanation:

when a corporation owns more than 50% of the common stock of another company, a parent-subsidiary relationship is formed that requires consolidated reporting.

Therefore,

when a corporation owns more than 50% of the common stock of another company, A parent company must prepare consolidated financial statements.

Thus,

Options-i is correct and remaining options are incorrect.

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