Presented Below Is the Balance Sheet of Hellman Company at January

question 97

Multiple Choice

Presented below is the balance sheet of Hellman 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 Swenson Company at January 1,2015 is below:
$\begin{array}{ll}\text { Cash } & \$ 400 \\\text { Net Fixed Assets } & {380} \\\text { Total Assets } & {\$ 780}\end{array}$
$\begin{array}{ll}\text { Accounts Payable } & \$ 120 \\\text { Long-term Bonds Payable } & 280 \\\text { Stockholders' Equity } & 380 \\\text { Total Liabilities and Stockholders' Equity } & \$ 780\end{array}$
On January 1,2015,Swenson Company acquired 100 percent of the outstanding common stock of Hellman Company for $260 cash.The book value and fair value of Hellman's assets and liabilities were equal.The net income for the year ending December 31,2015 was $30 for Hellman Company.The net income for the year ending December 31,2015 was $40 for Swenson Company.There were no intercompany sales.What is the net income on the consolidated income statement for the year ended December 31,2015?

• A) $0
• B) $30
• C) $40
• D) $70

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Definitions:

Leeward Side

The side of a mountain or hill sheltered from the wind; typically receives less precipitation.

Windward Side

The side of a mountain, island, or other land mass that faces the direction from which the wind is coming, often receiving more rainfall than the leeward side.

El Niño-Southern Oscillation

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Prevailing Easterly Winds

Winds that typically blow from the east, common in tropical regions close to the equator due to the Earth's rotation and atmospheric conditions.