The financial statements of Niall's Foods for the year ended December 31, 2013, reported the following details of acquisitions (adapted):
Assets: _______________________________________ In thousands
Cash .............................................................. $3,400
Non-cash current assets ....................................... 8,400
Property, plant, and equipment .............................. 72,000
Intangibles ...................................................... 700
$84,500
Liabilities:
Long-term debt ................................................ $16,400
Niall's Foods paid $121,000 cash for the acquisitions. Assume that the book value of the assets is equal to their fair value.
Required
1. How much goodwill did Niall's Foods purchase as part of the 2013 acquisitions?
2. Prepare the Niall's Foods summary journal entry to record the acquisition for 2013.
3. Assume that, in 2014, the annual review of goodwill identified a 15-percent impairment of the goodwill acquired in 2013. Prepare the journal entry required to record this impairment.