Question: Using the information above, answer the questions posed in the following two independent situations: a. On December 31, 20X2, there were indications that goodwill might

Using the information above, answer the questions posed in the following two independent situations:

a. On December 31, 20X2, there were indications that goodwill might have been impaired.

At that time, the existing recorded book value of Anton Company’s net assets, including goodwill, was $500,000. The fair value of the net assets, exclusive of goodwill, was estimated to be $340,000. The value of the business was estimated to be $520,000. Is goodwill impaired? If so, what adjustment is needed?

b. On December 31, 20X4, there were indications that goodwill might have been impaired.

At that time, the existing recorded book value of Anton Company’s net assets, including goodwill, was $450,000. The fair value of the net assets, exclusive of goodwill, was estimated to be $340,000. The value of the business was estimated to be $400,000. Is goodwill impaired? If so, what adjustment is needed?

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