Pinehollow Acquired 70% of the Outstanding Stock of Stonebriar by Issuing

question 39

Multiple Choice

Pinehollow acquired 70% of the outstanding stock of Stonebriar by issuing 70,000 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. What is the amount of the noncontrolling interest that will be included in the consolidated balance sheet immediately after the acquisition?

• A)$450,000
• B)$360,000
• C)$315,000
• D)$420,000