Following is the acquisition of the net assets of Dan Company, Epire Company assigned goodwill of $60,000
Question:
Following is the acquisition of the net assets of Dan Company, Epire Company assigned goodwill of $60,000 to one of the reporting divisions. Information for this division follows:
Carrying Amount | Fair Value | |
Cash | 20,000 | 20,000 |
Inventory | 35,000 | 40,000 |
Equipment | 125,000 | 160,000 |
Goodwill | 60,000 | |
Accounts Payable | 30,000 | 30,000 |
Based on the preceding information, determine the amount of (a) goodwill that will be reported and (b) goodwill impairment, if any, that will be recognized for this division for each scenario.
1. FAIR VALUE OF REPORTING UNIT IS $230,000
A. the amount of goodwill to be reported
B. the amount of goodwill impairment to be recognized, if any
2. FAIR VALUE OF THE REPORTING UNIT IS $200,000
A. the amount of goodwill to be reported
B. the amount of goodwill impairment to be recognized, if any
3. FAIR VALUE OF THE REPORTING UNIT IS $195,000
A. the amount of goodwill to be reported
B. the amount of goodwill impairment to be recognized, if any
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell