On January 1, Richard Company acquired all the net assets of Ulmer Company by issuing debt with a market value of $350,000 and a payment of cash of $300,000. The fair value of Ulmer's identifiable net assets equaled their book values except for buildings and equipment which had a fair value of $120,000 greater than book value. Balance sheets for the two companies immediately preceding the acquisition were as follows:

	Richard Co.	Ulmer Co.
Cash	$400,000	$150,000
Building & Equipment	700,000	400,000
Accumulated Depreciation	(300,000)	(150,000)
Other Identifiable Assets	100,000	200,000
Total Assets	$900,000	$600,000
Liabilities	$200,000	$100,000
Common Stock	400,000	300,000
Additional Paid-in Capital	160,000	100,000
Retained Earnings	140,000	100,000
Total Liabilities and Equity	$900,000	$600,000

The dollar balance of the gross amount (i.e. without accumulated depreciation) in the Buildings & Equipment account on the balance sheet of the combined companies immediately following the merger should be:

	1.	$1,100,000
	2.	$1,220,000
	3.	$1,070,000
	4.	$1,090,000
	5.	None of the above