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McGuire Company acquired 90 percent of Hogan Company on January 1, 2022, for $234,000 cash....

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Accounting

McGuire Company acquired 90 percent of Hogan Company on January 1, 2022, for $234,000 cash. This amount is reflective of Hogans total acquisition-date 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
Buildings (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.

In consolidation at January 1, 2022, what adjustment is necessary for Hogan's Patent account?

Multiple Choice

No adjustment is necessary.

$7,000

$6,300

$9,900

$11,000

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