Assume Paris's Inventory Account Had a Book Value of $40,000

question 14

Multiple Choice

Assume Paris's inventory account had a book value of $40,000 and a fair value of $44,000 on January 1,2011.Using the parent company theory,what was the amount reported on the consolidated balance sheet for inventories on January 1,2011?

• A)$65,000
• B)$66,000
• C)$69,000
• D)$70,000

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Definitions:

Materials Quantity Variance

Materials quantity variance is the difference between the actual quantity of materials used in production and the expected amount, multiplied by the standard cost of those materials, indicating efficiency in usage.

Price Standard

A predetermined cost that serves as a benchmark for evaluating the actual cost of goods sold or production costs.

Pounds

A unit of mass or weight commonly used in the British imperial and United States customary systems.

Materials Price Variance

The difference between the actual cost and the standard cost of materials used in production, multiplied by the quantity of materials used.