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. $440,000
C. $400,000
D. $480,000
Answer: A
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