Pinehollow acquired 80% of the outstanding stock of Stonebriar by issuing 80,000 shares of its $1 par value stock. The shares have a fair value of $15 per share. Pinehollow also paid $25,000 in direct acquisition costs. Prior to the transaction, the companies have the following balance sheets: Assets Pinehollow Stonebriar Cash $ 150,000 $ 50,000 Accounts receivable 500,000 350,000 Inventory 900,000 600,000 Property, plant, and equipment (net) 1,850,000 900,000 Total assets $3,400,000 $1,900,000 Liabilities and Stockholders' Equity Current liabilities $ 300,000 $ 100,000 Bonds payable 1,000,000 600,000 Common stock ($1 par) 300,000 100,000 Paid-in capital in excess of par 800,000 900,000 Retained earnings 1,000,000 200,000 Total liabilities and equity $3,400,000 $1,900,000 The fair values of Stonebriar's inventory and plant, property and equipment are $700,000 and $1,000,000, respectively. What is the amount of goodwill that will be included in the consolidated balance sheet immediately following the acquisition? Select one: a.$200,000 b.$240,000 c.$300,000 d.$100,000
Pinehollow acquired 80% of the outstanding stock of Stonebriar by issuing 80,000 shares of its $1 par value stock. The shares have a fair value of $15 per share. Pinehollow also paid $25,000 in direct acquisition costs. Prior to the transaction, the companies have the following balance sheets:
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Assets |
Pinehollow |
Stonebriar |
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|
Cash |
$ 150,000 |
$ 50,000 |
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|
|
500,000 |
350,000 |
|
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|
Inventory |
900,000 |
600,000 |
|
||
|
Property, plant, and equipment (net) |
1,850,000 |
900,000 |
|
||
|
Total assets |
$3,400,000 |
$1,900,000 |
|
||
|
|
|
|
|
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|
Liabilities and |
|
|
|
||
|
Current liabilities |
$ 300,000 |
$ 100,000 |
|
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|
Bonds payable |
1,000,000 |
600,000 |
|
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|
Common stock ($1 par) |
300,000 |
100,000 |
|
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|
Paid-in capital in excess of par |
800,000 |
900,000 |
|
||
|
|
1,000,000 |
200,000 |
|
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|
Total liabilities and equity |
$3,400,000 |
$1,900,000 |
|
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The fair values of Stonebriar's inventory and plant, property and equipment are $700,000 and $1,000,000, respectively. What is the amount of
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