Watkins, Inc If Watkins Pays $450,000 in Cash for Glen, What Amount

Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012. At that date, Glen owns only three assets and has no liabilities: $\begin{array}{|l|r|r|}\hline & \text { Book } & \text { Fair } \\\hline & \text { Value } & \text { Value } \\\hline \text { Inventory (FIFO method) } & \mathbf{\$} 40,000 & \mathbf{\$} 50,000 \\\hline \text { Equipment (10-year life) } & 80,000 & 75,000 \\\hline \text { Building (20-year life) } & 200,000 & 300,000 \\\hline\end{array}$ If Watkins pays $450,000 in cash for Glen, what amount would be represented as the subsidiary's Equipment in a consolidation at December 31, 2014, assuming the book value of the equipment at that date is still $80,000?

A) $70,000.
B) $73,500.
C) $75,000.
D) $76,500.
E) $80,000.