E$12\mathrm{.}21($LO $7,8,10)($Accounting for Goodwill$)$ On July $1,2023,$ Zoe Corporation

purchased the net assets of Soorya Company by paying $$415,000$ cash and issuing a $$50,000$

note payable to Soorya. At July $1,2023,$ the statement of financial position of Soorya was as

follows:

Cash $ $75,000$ Accounts payable $$300,000$

Accounts receivable $102,000$ Soorya, capital $239,000$

Inventory $98,000$ $$539,000$

Land $50,000$

Buildings $($net$)75,000$

Equipment $($net$)90,000$

Trademarks $($net$)49,000$

$$539,000$

The recorded amounts all approximate current values except for land $($worth $$60,000),$ inventory

$($worth $$125,000),$ and trademarks $($worthless$).$ The receivables are shown net of an allowance for

expected credit losses of $$12,000.$ The amounts for buildings, equipment, and trademarks are

shown net of accumulated amortization of $$14,000,$ $$23,000,$ and $$47,000,$ respectively.

Instructions

a$.$ Prepare the July $1,2023$ entry for Zoe to record the purchase.

b$.$ Assume that Zoe is a private entity and tested its goodwill for impairment on December $31,$

$2024.$ Management determined that the reporting unit$$s carrying amount $($including

goodwill$)$ was $$500,000$ and that the reporting unit$$s fair value $($including goodwill$)$ was

$$450,000.$ Determine if there is any impairment and prepare any necessary entry on

December $31,2024.$ Zoe applies ASPE.

c$.$ Repeat part $($a$),$ assuming that the purchase price was $$204,000,$ all paid in cash.

d$.$ Based on part $($a$),$ assume now that Zoe is a public entity and tested its goodwill for

impairment on December $31,2024.$ The cash$-$generating unit$$s values $($including goodwill$)$

are as follows:

Carrying

amount

$$500,000$

Value in use $475,000$

Fair value $450,000$

Disposal costs $25,000$

Determine if there is any impairment and prepare any necessary entry on December $31,$

$2024.$

e$.$ Based on part $($a$),$ discuss factors that Zoe may have considered in

deciding to pay total consideration of $$465,000$ for Soorya