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

Question

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

Quizplus · Accepted Answer

11eb11de_9334_6b49_ad38_45add8ff6755_TB2014_00 * Fair value derived as follows:
 11eb11de_9334_6b4a_ad38_cb8f16b69ed9_TB2014_00

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