The fair value of Selby Company’s assets and liabilities is equal to their book value except for the following:

Fair Value / Book Value
Inventory / $210,500 / $159,800
Plant and Equipment (10-year life) / 785,000 / 633,200

One-half of the inventory was sold in 2012, the remainder was sold in 2013.
At the end of 2012, Perry Company had in its ending inventory $60,400 of merchandise it had purchased from Selby Company during the year. Selby Company sold the merchandise at 25% above cost. During 2013, Perry Company sold merchandise to Selby Company for $311,200 at a markup of 20% of the selling price. At December 31, 2013, Selby still had merchandise that it purchased from Perry Company for $81,900 in its inventory.
Financial data for 2013 are presented here:

Perry
Corporation / Selby
Company
Sales / $1,393,300 / $807,900
Dividend Income / 19,760 / —
Total Revenue / 1,413,060 / 807,900
Cost of Goods Sold:
Beginning Inventory / 229,000 / 145,400
Purchases / 900,600 / 379,800
Cost of Goods Available / 1,129,600 / 525,200
Less: Ending Inventory / 452,000 / 198,100
Cost of Goods Sold / 677,600 / 327,100
Other Expenses / 251,000 / 195,700
Total Cost and Expense / 928,600 / 522,800
Net Income / $484,460 / $285,100
1/1 Retained Earnings / $1,506,400 / $479,100
Net Income / 484,460 / 285,100
Dividends Declared / (50,300 / ) / (24,700 / )
12/31 Retained Earnings / $1,940,560 / $739,500
Cash / $95,600 / $69,400
Accounts Receivable / 299,100 / 89,300
Inventory / 452,000 / 198,100
Investment in Selby Company / 999,700
Plant and Equipment (net) / 842,300 / 585,900
Other Assets (net) / 386,900 / 228,300
Total Assets / $3,075,600 / $1,171,000
Accounts Payable / $70,740 / $23,600
Other Liabilities / 102,400 / 60,100
Capital Stock / 961,900 / 347,800
Retained Earnings / 1,940,560 / 739,500
Total Liabilities and Equity / $3,075,600 / $1,171,000