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.

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Definitions:

Breast Development

The natural physiological process of growth and change that female breasts undergo during puberty and over the life span.

Emotional-Sexual Relationships

Connections between individuals that involve both emotional intimacy and sexual attraction or activity.

Homosexuals

Individuals who are romantically or sexually attracted to people of their same sex.

Reproductive Capability

The ability of an organism to produce offspring, thereby ensuring the continuation of its species.