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

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

a) $350,000

b) $570,000

c) $600,000

d) $500,000

\begin{tabular}{lrr} & Portland & Stockton \\ Total Assets & $1,000,000 & $500,000 \\ \cline { 2 - 3 } Liabilities & $300,000 & $150,000 \\ Common Stock (\$10 par) & 200,000 & 100,000 \\ Retained Earnings & 500,000 & 250,000 \\ \cline { 2 - 3 } Total Liabilities and Equities & $1,000,000 & $500,000 \\ \cline { 2 - 3 } \end{tabular}