Goehler, Inc. acquires all of the voting stock of Kenneth, Inc.on January 4, 2017, at an amount in excess of Kenneth's fair value.On that date, Kenneth has equipment with a book value of $90,000and a fair value of $120,000 (10-year remaining life). Goehler hasequipment with a book value of $800,000 and a fair value of$1,200,000 (10-year remaining life). On December 31, 2018, Goehlerhas equipment with a book value of $975,000 but a fair value of$1,350,000 and Kenneth has equipment with a book value of $105,000but a fair value of $125,000.
18) If Goehler applies the equity method in accounting forKenneth, what is the consolidated balance for the Equipment accountas of December 31, 2018?
A) $1,104,000.
B) $1,080,000.
C) $1,468,000.
D) $1,475,000.
E) $1,100,000.
19) If Goehler applies the partial equity method in accountingfor Kenneth, what is the consolidated balance for the Equipmentaccount as of December 31, 2018?
A) $1,475,000.
B) $1,080,000.
C) $1,468,000.
D) $1,100,000.
E) $1,104,000.
20) If Goehler applies the initial value method in accountingfor Kenneth, what is the consolidated balance for the Equipmentaccount as of December 31, 2018?
A) $1,080,000.
B) $1,104,000.
C) $1,475,000.
D) $1,100,000.
E) $1,468,000.
Please show works, Thanks!
