Use the following facts for Multiple Choice problems 29 and 30:

Assume that on January 1, 2016, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2016, prepared immediately before this transaction.

Book Values

Investor Investee

Receivables & inventories $125,000 $ 62,500

Land 250,000 125,000

Property & equipment, net 281,250 125,000

Total assets 656,250 312,500

Liabilities $187,500 $100,000

Common stock ($2 par) 25,000 12,500

Additional paid-in capital 350,000 187,500

Retained earnings 93,750 12,500

Total liabilities & equity $656,250 $312,500

30. Assume that the fair values of the investees net assets approximated the recorded book values of the investees net assets, except the fair value of receivables and inventories is $12,500 higher than book value, the fair value of land is $6,250 lower than book value, the fair value of property and equipment is $25,000 higher than book value and the fair value of liabilities is $8,750 lower than book value. In addition, the transaction resulted in goodwill in the amount of $31,250. What is the balance in the pre-consolidation investment in investee account on the investor companys books on January 1, 2016, immediately after the acquisition of the investee company voting common stock?

A. $383,750

B. $352,500

C. $283,750

d. Not enough information provided