Muscat Company purchased a 90% interest in Dhofar Corporation for O.R. 2,340,000 on January 1, 2013. Dhofar Corporation had O.R. 1,650,000 of common stock and O.R. 1,050,000 of retained earnings on that date.

The following values were determined for Dhofar Corporation on the date of purchase:

	Book Value	Fair Value
Inventory	O. R 240,000	O.R 300,000
Land	2,400,000	2,700,000
Equipment	1,620,000	1,800,000

Instructions:

1. Prepare the January 1, 2013, workpaper entries to eliminate the investment account and allocate the difference between implied and book value. .(7Marks)

2. What would be the balance of Equipment account after two years of acquisition? .(2 Marks)