What is the consolidated total for equipment (net) at December 31?

a. $740,000.

b. $756,000.

c. $760,000.

d. $765,000.

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (5-year life) that was undervalued on its books by $25,000.
Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.
As of December 31, the financial statements appeared as follows:

During the year, Jarel bought inventory for $80,000 and sold it to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.

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Revenues.. Cost of goods sold Expenses Net income. Retained earnings, 1/1 Net income Dividends paid Retained earnings, 12/31 Cash and receivables Inventory Investment in Suarez Equipment (net) Total assets Liabilities Common stock. Retained earnings, 12/31 Total liabilities and equities Jarel $ (300,000) Suarez $(200,000) 140,000 80,000 20,000 10,000 $ (140,000) $(110,000) $ (300,000) (140,000) -0- $(150,000) (110,000) -0- $ (440,000) $ 210,000 150,000 260,000 440,000 $ 1,060,000 $ (420,000) (200,000) (440,000) $(260,000) $ 90,000 110,000 -0- 300,000 $ 500,000 $(140,000) (100,000) (260,000) $(1,060,000) $(500,000)