1. Company P acquired 80% of the outstanding stock of Company S by issuing common stock with a market value of $550,000. The balance sheet of company S was as follows on the acquisition date:

Assets Liabilities and Equity

Cash $ 50,000 Liabilities $120,000

Inventory 120,000 Common stock, $10 par 100,000

Land 100,000 Other paid-in capital 150,000

Building (net) 350,000 Retained earnings 250,000

Total $620,000 Total $620,000

The market values were as follows: Inventory, $130,000; Land, $120,000; Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows as a result of this purchase?

1. $600,000.
2. $500,000.
3. $50,000.
4. $0.