McGuire Company acquired 90 percent of Hogan Company on January 1, 2010, 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
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.

In consolidation at December 31, 2011, what total adjustment is necessary for Hogan’s Equipment account?

Answer rating: 100% (QA)

ANSWER To determine the total adjustment necessary for Hogans Equipment account in the consolidation ... View the full answer