Pinehollow Acquired 80% of the Outstanding Stock of Stonebriar by Issuing

question 17

Multiple Choice

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: 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?

• A)$300,000
• B)$100,000
• C)$200,000
• D)$240,000

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Definitions:

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A popular dish of Italian origin consisting of a usually round, flattened base of leavened wheat-based dough topped with tomatoes, cheese, and often various other ingredients, baked at a high temperature.

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