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.