A Parent Company Acquires All of a Subsidiary's Voting Stock

Multiple Choice

A parent company acquires all of a subsidiary's voting stock at the beginning of 2018. At the date of acquisition, the subsidiary's equipment had a book value of $40 million and a fair value of $25 million. The equipment had a 10-year remaining life, straight-line. Consolidation eliminating entry (R) , on the consolidation working paper for 2021, reduces the net equipment account by what amount?

A) $10.5 million
B) $15.0 million
C) $ 9.0 million
D) $17.5 million