(Answered) Question - on 1111 able company acquired 80 of acme company

Accounting

Question - On 1/1/11 Able Company acquired 80% of ACME Company for $800,000. The book value of ACME's assets were $900,000 with no liabilities. All the assets of ACME equaled book value except a machine with a fair market value of $200,000 and a book value of $100,000. This machine has 5 years remaining with no salvage and is depreciated straight line. How much depreciation will be shown on ACME's books for this machine in 2011?

What amount of depreciation expense would be shown in 2011 on the Consolidated income statement?

a) 20,000

b) 40,000

c) 18,000

d) 36,000

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