Paro Company purchased 80% of the voting common stock of Sabon Company for $900,000. There are no liabilities. The following book and fair values are available for Sabon: The machinery will appear on the consolidated balance sheet at ____.
A)$600,000
B)$540,000
C)$480,000
D)$300,000

Question

Paro Company purchased 80% of the voting common stock of Sabon Company for $900,000. There are no liabilities. The following book and fair values are available for Sabon:  The machinery will appear on the consolidated balance sheet at ____.
A)$600,000 
B)$540,000 
C)$480,000 
D)$300,000

Quizplus · Accepted Answer

The consolidated balance sheet includes the subsidiary accounts at full fair value, even if less than 100% of the subsidiary's common stock is acquired.

Paro Company Purchased 80% of the Voting Common Stock of Sabon