Assume, further, that the acquisition was consummated on October 1, 2024, as described above. However, by...

  

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Assume, further, that the acquisition was consummated on October 1, 2024, as described above. However, by the end of 2025, Concord was concerned that the fair values of one or both of the acquired units had deteriorated. To test for impairment, Concord decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting units (Bridgeport and Bramble). Concord accumulated the following data: Year 2055 Bridgeport Bramble Present Value of Future Cash Flows $6,480,900 $1,917,200 Account Titles and Explanation Impairment Loss Goodwill Carrying Value of Identifiable Net Assets* $6,288,170 $1,204,200 *Identifiable Net Assets do not include goodwill. Prepare the journal entry, if needed, to record goodwill impairment at December 31, 2025. Use FASB's simplified approach to test for goodwill impairment (assume that the qualitative test is satisfied or bypassed). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Fair Value Identifiable Net Assets $6,298,170 Debit $1,004,200 Credit Stockholders of Concord Company, Bridgeport Company, and Bramble Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company's assets on October 1, 2024, were as follows: Assets Liabilities Common stock, $20 par value Other contributed capital Retained earnings (deficit) Total equities Fair values of assets Concord $3,865,200 $2,042,840 2,020,000 -0- (197,640) $3,865,200 $4,158,050 Bridgeport $7,560,100 $2,186,840 1,805,180 594,040 2,974,040 $7,560,100 $8,910,100 Bramble $947,540 $258,760 535,240 190,100 (36,560) $947,540 $1,305,390 Concord Company shares have a fair value of $52. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. Prepare a balance sheet for the business combination. Assume the following: Concord Company acquires all the assets and assumes all the liabilities of Bridgeport and Bramble Companies by issuing in exchange 140,130 shares of its common stock to Bridgeport Company and 40,110 shares of its common stock to Bramble Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) Assets (except goodwill) Goodwill Total Assets Liabilities Common Stock Retained Earnings CONCORD COMPANY Balance Sheet October 1, 2024 Other Contributed Capital Assets Total Liabilities and Stockholders' Equity $ Liabilities and Stockholders' Equity $ $ $ Assume, further, that the acquisition was consummated on October 1, 2024, as described above. However, by the end of 2025, Concord was concerned that the fair values of one or both of the acquired units had deteriorated. To test for impairment, Concord decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting units (Bridgeport and Bramble). Concord accumulated the following data: Year 2055 Bridgeport Bramble Present Value of Future Cash Flows $6,480,900 $1,917,200 Account Titles and Explanation Impairment Loss Goodwill Carrying Value of Identifiable Net Assets* $6,288,170 $1,204,200 *Identifiable Net Assets do not include goodwill. Prepare the journal entry, if needed, to record goodwill impairment at December 31, 2025. Use FASB's simplified approach to test for goodwill impairment (assume that the qualitative test is satisfied or bypassed). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Fair Value Identifiable Net Assets $6,298,170 Debit $1,004,200 Credit Stockholders of Concord Company, Bridgeport Company, and Bramble Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company's assets on October 1, 2024, were as follows: Assets Liabilities Common stock, $20 par value Other contributed capital Retained earnings (deficit) Total equities Fair values of assets Concord $3,865,200 $2,042,840 2,020,000 -0- (197,640) $3,865,200 $4,158,050 Bridgeport $7,560,100 $2,186,840 1,805,180 594,040 2,974,040 $7,560,100 $8,910,100 Bramble $947,540 $258,760 535,240 190,100 (36,560) $947,540 $1,305,390 Concord Company shares have a fair value of $52. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. Prepare a balance sheet for the business combination. Assume the following: Concord Company acquires all the assets and assumes all the liabilities of Bridgeport and Bramble Companies by issuing in exchange 140,130 shares of its common stock to Bridgeport Company and 40,110 shares of its common stock to Bramble Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) Assets (except goodwill) Goodwill Total Assets Liabilities Common Stock Retained Earnings CONCORD COMPANY Balance Sheet October 1, 2024 Other Contributed Capital Assets Total Liabilities and Stockholders' Equity $ Liabilities and Stockholders' Equity $ $ $

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Journal Entry for Goodwill Impairment Account Titles and Explanation Debit Credit Impairment Los... View the full answer