Question

Required Information SB McGuire Company acquired 90 percent of Hogan... 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 Value Buildings (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. MC Qu. 50 In consolidation at December 31... In consolidation at December 31, 2019, what adjustment is necessary for Hogan's Land account? Multiple Choice $8,000 decrease. $7,000 Increase. $6,300 Increase. $6,300 decrease. No adjustment is necessary.

          Required Information
SB McGuire Company acquired 90 percent of Hogan...
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 Value
Buildings (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.
MC Qu. 50 In consolidation at December 31...
In consolidation at December 31, 2019, what adjustment is necessary for Hogan's Land account?
Multiple Choice
$8,000 decrease.
$7,000 Increase.
$6,300 Increase.
$6,300 decrease.
No adjustment is necessary.

Required Information
SB McGuire Company acquired 90 percent of Hogan...
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 of160,000 and retained earnings of 80,000. An analysis of Hogan's net assets revealed the following:
Book Value Fair Value
Buildings (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.
MC Qu. 50 In consolidation at December 31...
In consolidation at December 31, 2019, what adjustment is necessary for Hogan's Land account?
Multiple Choice8,000 decrease.
7,000 Increase.6,300 Increase.
6,300 decrease.
No adjustment is necessary.

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