Mcguire company acquired 90 percent of hogan company on january 1, 2010, for $234,000 cash. this amount is reflective of hogan's total fair value. hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000.
an analysis of hogan's net assets revealed the following:

book value fair value
buildings (10-year life) $10,000 $8,000
equipment (4-year life) 14,000 18,000
land 5,000 12,000
any excess consideration transferred over fair value is attributable to an unamortized patent with a useful life of 5 years.
in consolidation at december 31, 2011, what adjustment is necessary for hogan's equipment account?

a) $1,800 increase
b) no adjustment is necessary
c) $2,000 increase
d) $1,800 decrease
e) $2,000 decrease

Presented below is a list of possible transactions. analyze the effect of the 18 transactions on the financial statement categories indicated. transactions assets liabilities owners’ equity net income 1. purchased inventory for $80,000 on account (assume perpetual system is used). 2. issued an $80,000 note payable in payment on account (see item 1 above). 3. recorded accrued interest on the note from item 2 above. 4. borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. recognized 4 months’ interest expense on the note from item 4 above. 6. recorded cash sales of $75,260, which includes 6% sales tax. 7. recorded wage expense of $35,000. the cash paid was $25,000; the difference was due to various amounts withheld. 8. recorded employer’s payroll taxes. 9. accrued accumulated vacation pay. 10. recorded an asset retirement obligation. 11. recorded bonuses due to employees. 12. recorded a contingent loss on a lawsuit that the company will probably lose. 13. accrued warranty expense (assume expense warranty approach). 14. paid warranty costs that were accrued in item 13 above. 15. recorded sales of product and related service-type warranties. 16. paid warranty costs under contracts from item 15 above. 17. recognized warranty revenue (see item 15 above). 18. recorded estimated liability for premium claims outstanding.