Question
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paars equipment (10-year life) has a book value of $407,500
Paar Corporation bought 100 percent of Kimmel, Inc., on January 1, 2015. On that date, Paars equipment (10-year life) has a book value of $407,500 but a fair value of $534,500. Kimmel has equipment (10-year life) with a book value of $287,000 but a fair value of $414,000. Paar uses the equity method to record its investment in Kimmel. On December 31, 2017, Paar has equipment with a book value of $285,250 but a fair value of $445,950. Kimmel has equipment with a book value of $200,900 but a fair value of $377,700. What is the consolidated balance for the Equipment account as of December 31, 2017?
A) $486,150.
B) $823,650.
C) $613,150.
D) $575,050.
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