Accounting for the Impairment of Goodwill During Year 1, Evergreen Corporation had been negotiating to purchase...

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Accounting for the Impairment of Goodwill During Year 1, Evergreen Corporation had been negotiating to purchase all of Pine Company's noncash assets and to assume all of its liabilities for a single cash price. The target closing date is January 1 of Year 2. Evergreen requested, and was provided, considerable data, including the following midyear balance sheet (summarized). Evergreen also independently estimated fair values of the assets and liabilities for each category provided on the balance sheet of Pine Co. Book Value from Fair Value Developed by Evergreen Balance Sheet, June 30, Year 1 Pine Co. Assets Corp. Cash $22,800 $ 0** Accounts receivable* 72,000 69,600 Inventory 168,000 108,000 Property, plant, and equipment* Land 360,000 342,000 13,200 48,000 Franchise (unamortized balance) 24,000 25,200 $660,000 $592,800 Total Liabilities Current liabilities $48,000 $44,400 240,000 240,000 Bonds payable Equity Stockholders' equity Total 372,000 $660,000 * Net of the allowance for doubtful accounts and accumulated depreciation, respectively. **Cash will not be purchased by Evergreen Corporation. Required a. Compute the amount of goodwill recorded by Evergreen Corporation for this purchase assuming that Pine Company is created as a new segment of Evergreen, that all goodwill is assigned to that segment, and the purchase price is $320,400. Goodwill: $ 0 b. Provide the entry for Evergreen Corporation to record the purchase of Pine Company. Account Name Dr. Cr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 To record purchase of Pine Company c. Provide the entry (if any) at the end of Year 2 to adjust goodwill for impairment assuming the following information. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Carrying value of the segment $300,000 Fair value of the segment 276,000 Date Year 2 Account Name To record year-end adjustment Dr. Cr. 0 0 0 Accounting for the Impairment of Goodwill During Year 1, Evergreen Corporation had been negotiating to purchase all of Pine Company's noncash assets and to assume all of its liabilities for a single cash price. The target closing date is January 1 of Year 2. Evergreen requested, and was provided, considerable data, including the following midyear balance sheet (summarized). Evergreen also independently estimated fair values of the assets and liabilities for each category provided on the balance sheet of Pine Co. Book Value from Fair Value Developed by Evergreen Balance Sheet, June 30, Year 1 Pine Co. Assets Corp. Cash $22,800 $ 0** Accounts receivable* 72,000 69,600 Inventory 168,000 108,000 Property, plant, and equipment* Land 360,000 342,000 13,200 48,000 Franchise (unamortized balance) 24,000 25,200 $660,000 $592,800 Total Liabilities Current liabilities $48,000 $44,400 240,000 240,000 Bonds payable Equity Stockholders' equity Total 372,000 $660,000 * Net of the allowance for doubtful accounts and accumulated depreciation, respectively. **Cash will not be purchased by Evergreen Corporation. Required a. Compute the amount of goodwill recorded by Evergreen Corporation for this purchase assuming that Pine Company is created as a new segment of Evergreen, that all goodwill is assigned to that segment, and the purchase price is $320,400. Goodwill: $ 0 b. Provide the entry for Evergreen Corporation to record the purchase of Pine Company. Account Name Dr. Cr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 To record purchase of Pine Company c. Provide the entry (if any) at the end of Year 2 to adjust goodwill for impairment assuming the following information. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Carrying value of the segment $300,000 Fair value of the segment 276,000 Date Year 2 Account Name To record year-end adjustment Dr. Cr. 0 0 0