McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash.

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:

                                    Book Value                 Fair Value

Building (10-year life)   10,000                        8,000

Equipment (4-year life) 14,000                       18,000

Land                                  5,000                        12,000  

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:

$24,000. $24,900. $20,000. $26,000. $23,400.

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