Tri State Co acquired the assets of Riley Co for $1,200,000 in 2013 The estimated fair market value of the assets at the acquisition date was $1,000,000 Goodwill of $200,000 was recorded at acquisition In 2014, because of negative publicity, one half of the goodwill acquired from Riley Co was judge...

a Any permanent impairment will be w ...

Tri-State Co. acquired the assets of Riley Co. for $1,200,000 in 2013. The estimated fair market value

Question:

Tri-State Co. acquired the assets of Riley Co. for $1,200,000 in 2013. The estimated fair market value of the assets at the acquisition date was $1,000,000. of $200,000 was recorded at acquisition. In 2014, because of negative publicity, one-half of the goodwill acquired from Riley Co. was judged to be permanently impaired.

Required
a. How will Tri-State account for the impairment of the goodwill?
b. Prepare the journal entry to record the permanent impairment of goodwill.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...