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: $$\begin{array} { l c c }
& \text { Book Value } & \text { Fair Value } \
\text { Buildings (10-year life) } & \$ 10,000 & \$ 8,000 \
\text { Equipment (4-year life) } & 14,000 & 18,000 \
\text { Land } & 5,000 & 12,000
\end{array}$$ 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:

Question

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: $$\begin{array} { l c c } 
& \text { Book Value } & \text { Fair Value } \
\text { Buildings (10-year life) } & \$ 10,000 & \$ 8,000 \
\text { Equipment (4-year life) } & 14,000 & 18,000 \
\text { Land } & 5,000 & 12,000
\end{array}$$ 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:

Quizplus · Accepted Answer

The Answer of 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: $$\begin{array} { l c c } 
& \text { Book Value } & \text { Fair Value } \
\text { Buildings (10-year life) } & \$ 10,000 & \$ 8,000 \
\text { Equipment (4-year life) } & 14,000 & 18,000 \
\text { Land } & 5,000 & 12,000
\end{array}$$ 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:

McGuire Company Acquired 90 Percent of Hogan Company on January