A Parent Company Purchases 100 Percent of the Outstanding Common

Multiple Choice

A parent company purchases 100 percent of the outstanding common stock in a subsidiary.What happens to the subsidiary the day after the purchase? Which of the following statements is FALSE?

A) The purchase by the parent company does not affect the subsidiary's books.
B) The subsidiary ceases to exist.
C) The subsidiary continues as a separate legal entity.
D) The subsidiary has its own set of books.