Grand Champion Inc. purchased Americas Sweethearts Corporation on January 1, 2016. At the time, Americas Sweethearts had
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Question:
Grand Champion Inc. purchased America’s Sweethearts Corporation on January 1, 2016. At the time, America’s Sweethearts had the following assets and liabilities (stated at fair value):
Cash | $62,000 |
Accounts receivable | 138,000 |
Inventory | 185,000 |
Property, plant, and equipment | 300,000 |
Patent | 65,000 |
Accounts payable | 200,000 |
Notes payable | 325,000 |
Grand Champion paid $900,000 for America’s Sweethearts. Assume that America’s Sweethearts is a reporting unit of Grand Champion. At the end of 2017, America’s Sweethearts has a fair value of $720,000 and a book value of $850,000, which includes any goodwill recorded. Of this fair value, $350,000 is attributable to identifiable assets net of assets and liabilities (or identifiable net assets).
Required:
Calculate the impairment loss of goodwill (if any) and record the appropriate journal entry. |
Related Book For
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
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