Part A:

The net assets of Jamal company at the end of 2019 was 500,000. The company received an offer to purchase the division for $470,000. All the identifiable assets and liabilities’ book and fair value amounts are the same.

Instruction:

1. Prepare the journal entry to record the impairment at the end of 2019 if any.

2. Prepare the entry to amortize the goodwill at the end of the year if the goodwill be amortized for 5 years. 

Part B:

If the net book value was $100,000 which is more than the net fire market value of the assets by 10%. During the period the company received an offer to purchase the net assets by $70,000.

Instruction:

1. Calculate the goodwill 

2. Record the Goodwill if you have the following accounts at FMV:

Account receivables 25,000; Loans 10,000; Short run investments 40,000 and building 35,000

Answer rating: 100% (QA)

ANSWER PartA 1 Since the book value and fair value of net identifiable ass... View the full answer