Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012. At that date, Glen owns only three assets and has no liabilities:

If Watkins pays $400,000 in cash for Glen, what amount would be represented as the subsidiary's Building in a consolidation at December 31, 2014, assuming the book value of the building at that date is still $200,000?
A.) $300000
B.) $285000
C.) $200000
D.) $268000
E.) $260000

Transcribed Image Text:

Inventory (FIFO method) Equipment (10-year life) Building (20-year life) Book Value 40,000 80,000 200,000 Fair Value 50,000 75,000 300,000