McGuire Company acquired 90 percent of Hogan Company on January 1, 2022, 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: Buildings (10-year life) Equipment (4-year life) Land Multiple Choice 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, 2023, what adjustment is necessary for Hogan's Buildings account? $1,440 increase $1,440 decrease $1,600 increase $1,600 decrease Book Value $ 10,000 14,000 5,000 No adjustment is necessary. Fair Value $8,000 18,000 12,000

McGuire Company acquired 90 percent of Hogan Company on January 1, 2022, 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: Buildings (10-year life) Equipment (4-year life) Land Multiple Choice 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, 2023, what adjustment is necessary for Hogan's Buildings account? $1,440 increase $1,440 decrease $1,600 increase $1,600 decrease Book Value $ 10,000 14,000 5,000 No adjustment is necessary. Fair Value $8,000 18,000 12,000

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 37RQSC

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