A subsidiary was acquired for cash in a business combination on December $31,2016.$ The purchase price exceeded the fair value of identifiable net assets. The acquired company owned equipment with a fair value in excess of the book value as of the date of the combination. A consolidated balance sheet prepared on December $31,2016,$ would

Group of answer choices

$$report the excess of the fair value over the book value of the equipment as part of goodwill.

$$report the excess of the fair value over the book value of the equipment as part of the plant and equipment account.

$$reduce retained earnings for the excess of the fair value of the equipment over its book value.

$$make no adjustment for the excess of the fair value of the equipment over book value. Instead, it is an adjustment to expense over the life of the equipment.