Presented Below Are the Balance Sheets of Monty Company and Hall

question 7

Multiple Choice

Presented below are the balance sheets of Monty Company and Hall Company at January 1, 20X6: $\begin{array}{lrlr}\text { Hall Company } && \text { Monty Company } \\\text { Balance Sheet } && \text { Balance Sheet } \\\text { January } 1,20 \mathrm{X} 6 && \text { January } 1,20 \mathrm{X} 6\\\text { Cash } & \$ 100 & \text { Cash } & \$ 400 \\\text { Net fixed assets } & 400 & \text { Net fixed assets } & 380 \\\text { Total assets } & \$ 500 & \text { Total assets } & \$ 780\\\text { Accounts payable } & \$ 20 &\text { Accounts payable }&\$120\\\text { Long-term bonds }&&\text { Long-term bonds }\\\text { payable } & 220 & \text { payable } & 280 \\\text { Stockholders' equity } & \underline{260} & \text { Stockholders' equity } & \underline{380}\\\text { Total liabilities and } & - & \text { Total liabilities and } & \\\text { stockholders' equity } & \$ 500 & \text { stockholders' equity } & \$ 780\end{array}$ On January 1, 20X6, Monty Company acquired 100% of the outstanding common stock of Hall Company for $260 in cash._____ is the balance of the Investment in Hall Stock on the consolidated balance sheet immediately after the acquisition of Hall's stock.

• A)$-0-
• B)$260
• C)$380
• D)$500

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Definitions:

Divide

A mathematical operation in which one number (the dividend) is divided by another (the divisor), resulting in a quotient and sometimes a remainder.

Lowest Common Denominator

The smallest common multiple of the denominators of two or more fractions.

Percentage

A fraction or ratio expressed as a part of 100.

Improper Fraction

A fraction where the numerator is greater than or equal to the denominator, indicating a value greater than or equal to one.