REFERENCE: Ref.03_08 Goehler,Inc.acquires All of the Voting Stock of Kenneth,Inc.on January 4,2009,at

question 11

Multiple Choice

REFERENCE: Ref.03_08
Goehler,Inc.acquires all of the voting stock of Kenneth,Inc.on January 4,2009,at a price in excess of Kenneth's fair value.On that date,Kenneth has equipment with a book value of $90,000 and a fair value of $120,000 (10-year remaining life) .Goehler has equipment with a book value of $800,000 and a fair value of $1,200,000 (10-year remaining life) .On December 31,2010,Goehler has equipment with a book value of $975,000 but a fair value of $1,350,000 and Kenneth has equipment with a book value of $105,000 but a fair value of $125,000.
-If Goehler applies the equity method in accounting for Kenneth,what is the consolidated balance for the Equipment account as of December 31,2010?

• A)$1,080,000.
• B)$1,104,000.
• C)$1,100,000.
• D)$1,468,000.
• E)$1,475,000.

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Definitions:

Manufacturer

A person or company that makes goods for sale, especially on a large scale through the use of machines.

National Cooperative Research Act

U.S. legislation that encourages collaborative research and development among businesses by providing certain antitrust protections.

Joint Research

Collaborative investigative efforts undertaken by two or more parties to achieve a common goal or to further their knowledge in a specific area.

Development Ventures

Business projects or investments focused on the development of new products, markets, or technologies.