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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?

Definitions:

Conscious Experience

The awareness of the self, one's thoughts, and the environment, forming the basis of subjectivity and personal experience.

Autonomic Arousal

The activation of the autonomic nervous system, governing involuntary physiological responses to stimuli.

Fear

A primal emotion triggered by the perception of danger, real or imagined, leading to fight-or-flight responses.

James-Lange Theory

A theory of emotion suggesting that physiological arousal precedes and causes the emotional experience, contrary to the common-sense view.