On January 1,20X8,Polo Corporation Acquired 75 Percent of Stallion Company's

Multiple Choice

On January 1,20X8,Polo Corporation acquired 75 percent of Stallion Company's voting common stock for $300,000.At the time of the combination,Stallion reported common stock outstanding of $200,000 and retained earnings of $150,000,and the fair value of the noncontrolling interest was $100,000.The book value of Stallion's net assets approximated market value except for patents that had a market value of $50,000 more than their book value.The patents had a remaining economic life of ten years at the date of the business combination.Stallion reported net income of $40,000 and paid dividends of $10,000 during 20X8.
-Based on the preceding information,what balance will Polo report as its investment in Stallion at December 31,20X8,assuming Polo uses the equity method in accounting for its investment?

A) $318,750
B) $317,500
C) $330,000
D) $326,250