On January 1, 20X1, Portland Corporation issued 10,000 shares of common stock in exchange for all of Stockton Corporation’s outstanding stock. Condensed balance sheets of Portland and Stockton immediately before the combination follow:

Portland’s common stock had a market price of $60 per share on January 1, 20X1. The market price of Stockton’s stock was not readily determinable. The fair value of Stockton’s net identifiable assets was determined to be $570,000. Portland’s investment in Stockton’s stock will be stated in Portland’s balance sheet immediately after the combination in the amount of

a. $350,000.

b. $500,000.

c. $570,000.

d. $600,000.

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Total Assets Liabilities Common Stock ($10 par) Retained Earnings Total Liabilities & Equities Portland Stockton $1,000,000 $500,000 $150,000 $ 300,000 200,000 500,000 $1,000,000 100,000 250,000 $500,000