Question: On January 1 2009 Affordable Financial Inc purchased the assets

On January 1, 2009, Affordable Financial, Inc., purchased the assets of Bisko Insurance Co. for $65,000,000, a price reflecting a $10,000,000 goodwill premium.
On December 31, 2012, Affordable Financial determined that the goodwill from the Bisko acquisition was impaired and had a value of only $4,000,000.
a. Determine the book value of the goodwill on December 31, 2012, prior to making the impairment adjustment.
b. Illustrate the effects on the accounts and financial statements of the December 31, 2012, adjustment for the goodwill impairment.

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  • CreatedFebruary 04, 2014
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