Using the information from RE12-9, assume that America’s Sweethearts is a reporting unit of Grand Champion. At the end of 2017, America’s Sweethearts has a lair value of $720,000 and a book value of $850,000, which includes any goodwill recorded in RE12-9. Of this fair value, $350,000 is attributable to identifiable assets net of (or identifiable net assets) liabilities. Calculate the impairment loss of goodwill (if any) and record the appropriate journal entry.
In RE12-9
Cash ............... $ 62,000
Accounts receivable ........ 13 8,000
Inventory ............ 185,000
Property, plant, and equipment .... 300,000
Patent .............. 65,000
Accounts payable .......... 200,000
Notes payable ............ 325,000