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

question 47

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 partial equity method in accounting for Kenneth,what is the consolidated balance for the Equipment account as of December 31,2010?

Definitions:

Profit

The profit achieved when the revenue generated from a business operation surpasses the expenses, costs, and taxes needed to maintain the operation.

External Effects

Also known as externalities, these are positive or negative consequences of economic activities experienced by unrelated third parties.

Highly Differentiated

Products or services that are distinct and stand out from those of competitors because of features, quality, or design.

Dysfunctional Conflict

Conflict that is detrimental to organizational goals and personal relationships, often escalating tensions without resolution.