McGuire Company Acquired 90 Percent of Hogan Company on January

question 85

Multiple Choice

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: 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, 2019, what adjustment is necessary for Hogan's Buildings account?

• A)$1,620 increase.
• B)$1,620 decrease.
• C)$1,800 increase.
• D)$1,800 decrease.
• E)No adjustment is necessary.

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Definitions:

Creatively

In a manner that involves the use of imagination or original ideas to create something or solve problems.

Flexible Thinking

The ability to adapt thoughts and behaviors in response to changing circumstances or new information.

Brainstorming

A group discussion technique aimed at generating a wide range of ideas or solutions to a problem, without immediate criticism or evaluation.

Acculturation

The process by which individuals or groups adopt the culture of another group, often through direct contact and interaction.