On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $449,560 cash....

  

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On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $449,560 cash. The fair value of Saab's identifiable net assets was $375,570 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Carrying Value of Saab's Identifiable Saab's Identifiable Fair Value Present Value Year of Future Cash Flows Net Assets* Net Assets $400,010 $400,200 2014 $329,889 $339,483 $319,633 $300,390 $344,490 $324,470 2015 2016 $349,660 * Identifiable net assets do not include goodwill. v (a) V Your answer is correct. For each year determine the amount of goodwill impairment, if any. 2014 2015 2016 13563 35337 Goodwill impairment SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 4 of 5 used v (b) Prepare the journal entries needed each year to record the goodwill impairment (if any) on Porsche's books from 2014 to 2016. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Year Account Titles and Explanation Debit Credit 2014 2015 2016 On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $449,560 cash. The fair value of Saab's identifiable net assets was $375,570 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Carrying Value of Saab's Identifiable Saab's Identifiable Fair Value Present Value Year of Future Cash Flows Net Assets* Net Assets $400,010 $400,200 2014 $329,889 $339,483 $319,633 $300,390 $344,490 $324,470 2015 2016 $349,660 * Identifiable net assets do not include goodwill. v (a) V Your answer is correct. For each year determine the amount of goodwill impairment, if any. 2014 2015 2016 13563 35337 Goodwill impairment SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 4 of 5 used v (b) Prepare the journal entries needed each year to record the goodwill impairment (if any) on Porsche's books from 2014 to 2016. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Year Account Titles and Explanation Debit Credit 2014 2015 2016

Answer rating: 100% (QA)

Part A 2014 Step 1 Fair value of the reporting unit 400010 Carrying value of unit Carrying value of ... View the full answer