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?

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B)Under the parent company theory,the Inventory account on the consolidated balance sheet would be the sum of the book value of the parent's Inventory account balance of $40,000 plus the book value of the Inventory account on the subsidiary's books of $30,000 less 80% of the $5,000 excess of the book value in excess of fair value,or ($4,000),for a total of $66,000.

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