Presented Below Is the Balance Sheet of Houser Company at January

question 55

Multiple Choice

Presented below is the balance sheet of Houser Company at January 1,2015:
$\begin{array}{ll}\text { Cash } & \$ 100 \\\text { Net Fixed Assets } & 400 \\\text { Total Assets } & \$500\end{array}$
$\begin{array}{ll}\text { Accounts Payable } & \$ 20 \\\text { Long-term Bonds Payable } & 220 \\\text { Stockholders' Equity } & \underline{260} \\\text { Total Liabilities and Stockholders' Equity } & \$ 500\end{array}$
The balance sheet of Maury Company at January 1,2015 is below:
$\begin{array}{ll}\text { Cash } & \$ 400 \\\text { Net Fixed Assets } &{380} \\\text { Total Assets } &{\$ 780}\end{array}$
$\begin{array}{ll}\text { Accounts Payable } & \$ 120 \\\text { Long-term Bonds Payable } & 280 \\\text { Stockholders' Equity } & \underline{380} \\\text { Total Liabilities and Stockholders' Equity } & \$ 780\end{array}$
On January 1,2015,Maury Company acquired 100 percent of the outstanding common stock of Houser Company for $260 cash.The book value and fair value of Houser's assets and liabilities were equal.What is the amount of Total Assets on the consolidated balance sheet immediately after the acquisition of Houser Company's stock? (Assume elimination entries are completed.)

• A) $0
• B) $780
• C) $1,020
• D) $1,280

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Definitions:

Financial Assets

Assets that are paper claims on some return or income, such as stocks, bonds, or bank deposits.

Factors Of Production

Elements involved in generating goods and services, such as land, workforce, financial investment, and entrepreneurial skill.

Production Possibilities Frontier

A graph that shows the highest production levels of two products, based on available resources and various factors.

Trade-offs

The idea of sacrificing one positive aspect or perk to obtain another that is considered to be more desirable.