Pail,IncHolds 100 Percent of the Common Stock of Shovel Company,an

Multiple Choice

Pail,Inc.holds 100 percent of the common stock of Shovel Company,an investment acquired for $680,000.Immediately following the combination,Pail's net assets have a book value of $1,150,000 and a fair value of $1,390,000.The book value and the fair value of Shovel's net assets on the date of combination are $400,000 and $550,000,respectively.Immediately following the combination,a consolidated balance sheet is prepared.
-Based on the information given above,at what amount will Pail's investment in Shovel stock be reported in the consolidated balance sheet?

A) $0
B) $400,000
C) $440,000
D) $480,000