Parr Company Purchased 100% of the Voting Common Stock of Super

question 22

Multiple Choice

Parr Company purchased 100% of the voting common stock of Super Company for $2,000,000. There are no liabilities. The following book and fair values are available: The machinery will appear on the consolidated balance sheet at ____.

• A) $560,000
• B) $860,000
• C) $600,000
• D) $900,000

---

Definitions:

Goods In Transit

Items that are in the process of being transported from one location to another, not yet reached the buyer or final destination.

Gross Profit

The financial metric that subtracts the cost of goods sold from sales revenue, representing the amount a company makes after covering the direct costs associated with production.

Selling Expenses

Costs associated with marketing and selling a company's products or services.

Net Income

Net income, also known as net profit, is the total earnings of a company after subtracting all expenses, taxes, and costs from total revenue.