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 $13 per share. Pinehollow also paid $25,000 in direct acquisition costs. Prior to the transaction, the companies have the following balance sheets: Assets Pinehollow Stonebriar Cash $ 150,000 $ 50,000 Accounts receivable 500,000 350,000 Inventory 900,000 600,000 Property, plant, and equipment (net) 1,850,000 900,000 Total assets $3,400,000 $1,900,000 Liabilities and Stockholders' Equity Current liabilities $ 300,000 $ 100,000 Bonds payable 1,000,000 600,000 Common stock ($1 par) 300,000 100,000 Paid-in capital in excess of par 800,000 900,000 Retained earnings 1,000,000 200,000 Total liabilities and equity $3,400,000 $1,900,000 The fair values of Stonebriar's inventory and plant, property and equipment are $700,000 and $1,000,000, respectively. 4. In the consolidation worksheet right after the acquisition, Pinehollow would recognize a. Goodwill of $70,000 b. Goodwill of $100,000 c. Gains on acquisition of subsidiary $70,000 d. Gains on acquisition of subsidiary $100,000