Problem

Willkom Corporation bought 100 percent of Szabo, Inc., on January 1, 2011.On that date, Wi...

Willkom Corporation bought 100 percent of Szabo, Inc., on January 1, 2011.On that date, Willkom’s equipment (10-year life) has a book value of $300,000 but a fair value of $400,000.Szabo has equipment (10-year life) with a book value of $200,000 but a fair value of $300,000.Willkom uses the equity method to record its investment in Szabo.On December31, 2013,Willkom has equipment with a book value of $210,000 but a fair valueof $330,000. Szabo has equipment with a book value of $140,000 but a fair value of $270,000. Whatis the consoli­dated balance for the Equipment account as of December 31,2013?

a. $600,000.

b. $490,000.

c. $480,000.

d. $420,000.

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