Pinehollow Acquired All of the Outstanding Stock of Stonebriar by Issuing

question 36

Multiple Choice

Pinehollow acquired all of the outstanding stock of Stonebriar by issuing 100,000 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: The fair values of Stonebriar's inventory and plant, property and equipment are $700,000 and $1,000,000, respectively. The journal entry to record the purchase of Stonebriar would include a

• A)credit to common stock for $1,500,000.
• B)credit to paid-in capital in excess of par for $1,100,000.
• C)debit to investment for $1,500,000.
• D)debit to investment for $1,525,000.

Appreciate the importance of reliability and consistency in performance ratings.

Understand the strategic alignment of performance evaluations with organizational goals.

Recognize the value of peer evaluations and the circumstances under which they are most effective.

Understand and categorize different performance review methods and their applications.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for some differentiation and price control.

Long-Run Economic Profits

The sustained extra income a firm generates when all inputs are variable, indicating the firm's long-term competitive advantage.

Monopolistic Competition

Monopolistic competition is a market structure where many companies sell products that are similar but not identical, allowing for product differentiation and some degree of market power.

Marginal Benefit

The incremental advantage received by using one more unit of a good or service.