Pinehollow Acquired All of the Outstanding Stock of Stonebriar by Issuing

question 44

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:
$\begin{array}{lrr}\text { Assets } &\text { Pinehollow } & \text { Stonebriar }\\\text { Cash } & \$ 150,000 & \$ 50,000 \\\text { Accounts receivable } & 500,000 & 350,000 \\\text { Inventory } & 900,000 & 600,000 \\\text { Property, plant, and equipment (net) } & \underline{1,850,000} & 900,000 \\\text { Total assets } & \$ 3,400,000 & \$ 1,900,000\\\\\text { Liabilities and Stockholders' Equity }\\ \text { Current liabilities } & \$ 300,000 & \$ 100,000 \\\text { Bonds payable } & 1,000,000 & 600,000 \\\text { Common stock ( } \$ 1 \text { par) } & 300,000 & 100,000 \\\text { Paid-in capital in excess of par } & 800,000 & 900,000 \\\text { Retained earnings } & \underline{1,000,000} & \underline{200,000} \\\text { Total liabilities and equity } & \$ 3,400,000 & \$ 1,900,000\end{array}$

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 property, plant and equipment that will be included in the consolidated balance sheet immediately after the acquisition?

• A)$2,570,000
• B)$2,750,000
• C)$2,850,000
• D)$2,650,000

Differentiate between various types of economic relationships as demonstrated through slopes and curves.

Grasp the basic principles of cost production and consumption relationships in economics.

Understand the concept and calculation of the slope in economic models.

Learn the significance of stability and its criteria in economic contexts.

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Definitions:

Basilar Membrane

A membrane in the cochlea of the inner ear, playing a critical role in sound vibration analysis and hearing.

Sound Wave Amplitude

The height of a sound wave, determining the loudness or intensity of the sound perceived.

Action Potentials

Rapid changes in the electrical charge of a neuron's membrane, allowing the transmission of nerve signals.

Hair Cells

Sensory cells found in the inner ear that convert sound waves into electrical signals that can be interpreted by the brain.