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Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had...

Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had land with a book value of $42,000 and a fair value of $52,000. Also, on the date of acquisition, Boston had a building with a book value of $200,000 and a fair value of $390,000. Boston had equipment with a book value of $350,000 and a fair value of $280,000. Both companies use the same depreciation policy, that the building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life.

On December 31, 2020, the two companies have the following assets:

Lowell

Boston

BV

FV

BV

FV

Land

50,000

60,000

32,000

45,000

Building

300,000

500,000

120,000

234,000

Equipment

600,000

390,000

70,000

56,000

When preparing the consolidation [A] entry to adjust the Buildings on December 31, 2020, Lowell should debit the building for what?

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Answer #1

Lowell Building - Book Value 300,000 Fur value 500.000 Depreciation policy - not mentioned consolidation entry for adjustment

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