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

question 9

Multiple Choice

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

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Definitions:

Drones

UAVs are aircraft systems that can be operated from a distance or navigate independently using flight plans programmed into their onboard software.

Average Variable Costs

The total variable costs of production divided by the quantity of output produced, representing the per-unit variable cost of production.

Drones

Unmanned aerial vehicles (UAVs) that are used for various purposes, including surveillance, delivery, or recreation.

TFC

Total Fixed Costs, referring to the sum of all costs that remain constant regardless of the level of output or production.