Saved Help Save & Exit Sub Paar Corporation bought 100 percent of Kimmel, Inc, o

Question

Saved Help Save & Exit Sub Paar Corporation bought 100 percent of Kimmel, Inc, on January 1,2015. On that date, Paar's equipment (10-year lifel) has a book value of $470,000 but a fair value of $648,000. Kimmel has equipment (10-year life) with a book value of $259,000 but a fair value of $437,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2 book value of $329,000 but a fair value of $533,500. Kimmel has equipment with a book value of $181.300 but a fair value of $403,400. What is the consolidated balance for the Equipment account as of December 31, 20177 Multiple Choice $688,300. $634,900. $936,900

Explanation / Answer

B. $634,900

Paar’s equipment book value—12/31/17 $329,000 Kimmel’s equipment book value—12/31/17 $181,300 Original acquisition-date allocation to Kimmel's equipment($437,000 $259,000) $178,000 Amortization of allocation($178,000 ÷ 10 years) * 3 years ($53,400) Consolidated equipment $634,900

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