McGuire Company acquired 90 percent of Hogan Company on January 1, 2019, for $234,000 cash. This amount is reflective of Hogan's total acquisition-date fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Book Value Fair ValueBuildings (10-year life)$10,000 $8,000 Equipment (4-year life) 14,000 18,000 Land 5,000 12,000 ??Any excess consideration transferred over fair value is attributable to an unamortized patent with a useful life of 5 years.?In consolidation at December 31, 2020, what adjustment is necessary for Hogan's Buildings account?
A. $1,600 decrease.
B. $1,600 increase.
C. $1,440 decrease.
D. $1,440 increase.
E. No adjustment is necessary.
Answer: A
You might also like to view...
In a troubled debt restructuring that involves only a modification of terms, if the amount to be repaid is greater than the current carrying value of the liability
A) no gain or loss would be recognized by the debtor. B) an ordinary gain would be recognized by the debtor. C) a prior period adjustment would be recognized by the debtor. D) an ordinary loss would be recognized by the debtor.
The network marketing sales system works by recruiting independent businesspeople who act as distributors
Indicate whether the statement is true or false
Perspective taking skills play an important role in which component of ethical behavior?
A. moral judgment B. moral sensitivity (recognition) C. moral motivation D. moral character
Of the four values-based leadership styles, ___________ is most closely related to higher organizational commitment and productivity.
a. Authentic leadership b. Spiritual leadership c. Servant leadership d. Ethical leadership