The financial statements of Mei’s Foods for the year ended December 31, 2022, reported the following details of acquisitions:

Mei’s Foods paid $91,000 cash for the acquisitions. Assume that the book value of the assets is equal to their fair value.

Required

1. How much goodwill did Mei’s Foods purchase as part of the 2022 acquisitions?

2. Prepare the summary journal entry to record the acquisition at December 31, 2022.

3. Assume that, in 2023, the annual review of goodwill at December 31 identified a 15 percent impairment of the goodwill acquired in 2022. Prepare the journal entry required to record this impairment.

Transcribed Image Text:

Assets Cash Accounts receivable Equipment Intangibles Liabilities Long-term debt $ 3,400 8,400 72,000 700 $84,500 $16,400