Presented Below Are the Balance Sheets of Monty Company and Hall

question 99

Multiple Choice

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

• A) $640
• B) $380
• C) $260
• D) $- 0-

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Definitions:

Production Capacity

The maximum output that a company or economy can produce under normal conditions within a given period, often influenced by available resources and technology.

Diminishing Returns

A principle indicating that as more of a variable input is added to a fixed input, the added output from each additional unit of input will eventually decrease.

Resource Labor

The work force considered as an economic resource, emphasizing the skills and abilities workers bring to the economy.

Marginal Output

The additional quantity of output that is produced by using one more unit of a particular input, holding all other inputs constant.