McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash.
McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash. This amount is reflective of Hogan's total 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 Building (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. The acquisition value attributable to the non-controlling interest at January 1, 2014 is: $24,000. $24,900. $20,000. $26,000. $23,400.
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McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash. This amount is reflective of Hogan's total 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
Building (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.
The acquisition value attributable to the non-controlling interest at January 1, 2014 is:
$24,000. $24,900. $20,000. $26,000. $23,400.
