Company P Acquired 80% of the Outstanding Common Stock of the Company

question 12

Multiple Choice

Company P acquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: The market values were as follows: Inventory, $130,000; Land, $120,000; Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase?

• A)$600,000
• B)$500,000
• C)$50,000
• D)$0

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