Anton Company acquired the net assets of Hair Company on January 1, 2011, for $600,000. Using a

Question:

Anton Company acquired the net assets of Hair Company on January 1, 2011, for $600,000. Using a business valuation model, the estimated value of Anton Company was $650,000 immediately after the acquisition. The fair value of Anton’s net assets was $400,000.
1. What amount of was recorded by Anton Company when it acquired Hair Company?
2. Using the information on page 41, answer the questions posed in the following two independent situations:
a. On December 31, 2012, there were indications that might have been impaired. At that time, the existing recorded book value of Anton Company’s net assets, including , was $500,000. The fair value of the net assets, exclusive of , was estimated to be $340,000. The value of the business was estimated to be $520,000. Is good-will impaired? If so, what adjustment is needed?
b. On December 31, 2014, there were indications that might have been impaired. At that time, the existing recorded book value of Anton Company’s net assets, including , was $450,000. The fair value of the net assets, exclusive of , was estimated to be $340,000. The value of the business was estimated to be $400,000. Is good-will impaired? If so, what adjustment is needed?
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...