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If a holding company purchases shares of a subsidiary company at a price higher than their paid-up value, the excess amount is classified as:
  • a)
    Capital Profit.
  • b)
    Capital Reserve.
  • c)
    Cost of Control (Goodwill).
  • d)
    Revenue Profit.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
If a holding company purchases shares of a subsidiary company at a pri...
If the holding company purchases shares at a price higher than the paid-up value, the excess amount is considered the cost of control or goodwill.
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If a holding company purchases shares of a subsidiary company at a price higher than their paid-up value, the excess amount is classified as:a)Capital Profit.b)Capital Reserve.c)Cost of Control (Goodwill).d)Revenue Profit.Correct answer is option 'C'. Can you explain this answer?
Question Description
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