Reference no: EM132675420

Raby, Inc. acquires all of the outstanding stock of Fletcher Corporation on January 1, 2017. At that date, Fletcher owns only three assets and has no liabilities:

                                               BV                   FV

LAND                              40,000         50,000
EQUIPMENT(10 YR LIFE)    80,000          75,000
BUILDING(20 YR LIFE)         200,000          300,00

Problem 1: If Raby pays $450,000 in cash for Fletcher, what amount would be represented as the subsidiary's Building in a consolidation at December 31, 2019, assuming the book value of the building at that date is still $200,000?

Problem 2: If Raby pays $450,000 in cash for Fletcher, what amount would be represented as the subsidiary's Equipment in a consolidation at December 31, 2019, assuming the book value of the equipment at that date is still $80,000?