On December 31, Year One, Giant Company acquired 100 percent of the outstanding stock of Tiny Company. On that date, Tiny was reporting inventory with a cost of $30,000 (but a fair value of $45,000) and sales for the year of $400,000. Upon acquisition, Giant produces consolidated financial statements to combine the two companies. Which of the following statements is correct about these consolidated statements?
Tiny's inventory is included at $30,000 but none of its revenues are included.
Tiny's inventory is included at $30,000 as well as its revenue of $400,000.
Tiny's inventory is included at $45,000 but none of its revenues are included.
Tiny's inventory is included at $45,000 as well as its revenue of $400,000.