A PlayerO (1488) Example: Interest Capit xGrades for Preston Porter: ACC XAnswered: Exercise 12-9Durin X +s.ucf.edu/courses/1336012/assignments/6285656OtherCurrent Attempt in ProgressOn July 31, 2020, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (areporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition.Current assets$730,000Current liabilities$570,000Noncurrent assetsort2,400,000Long-term liabilities470,000Total assets$3,130,000Stockholders' equity2,090,000cesTotal liabilities and stockholders' equity$3,130,000It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months ofoperations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for theforeseeable future. At December 31, 2020, Conchita reports the following balance sheet information.Current assets$410,000Noncurrent assets (including goodwill recognized in purchase)2,060,000Current liabilities(700,000 )Long-term liabilities(500,000 )Net assets$1,270,000Finally, it is determined that the fair value of the Conchita Division is $1,850,000.Your answer is correct.Compute the amount of goodwill recognized, if any, on July 31, 2020. (If answer is zero, do not leave answer field blank. Enter O for the amount.)MacBook ProDIIF12F11F10F9F8F7F6F3F2F5F4#3&del804.32{YнMI+ |/ A Player(1488) Example: Interest Capit XGrades for Preston Porter: ACAnswered: Exercise 12-9During XXurses.ucf.edu/courses/1336012/assignments/6285656Other BookYour answer is incorrect.Assume that fair value of the Conchita Division is $1,224,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded onDecember 31, 2020. (If answer is zero, do not leave answer field blank. Enter O for the amount.)$The impairment loss-199000eTextbook and MediaList of AccpuntsYour answer is partially correct.Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter O for the amounts.)CreditDebitAccount Titles and Explanation199000Loss on Impairment199000GoodwillIncome From Continuing OperationsThis loss will be reported in income as a separate line item before the subtotalMacBook ProF12F11DIIF10888F7F5F4F3&23E11нGвC00S.

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Asked Dec 8, 2019
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A Player
O (1488) Example: Interest Capit x
Grades for Preston Porter: ACC X
Answered: Exercise 12-9Durin X +
s.ucf.edu/courses/1336012/assignments/6285656
Other
Current Attempt in Progress
On July 31, 2020, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a
reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition.
Current assets
$730,000
Current liabilities
$570,000
Noncurrent assets
ort
2,400,000
Long-term liabilities
470,000
Total assets
$3,130,000
Stockholders' equity
2,090,000
ces
Total liabilities and stockholders' equity
$3,130,000
It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of
operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the
foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information.
Current assets
$410,000
Noncurrent assets (including goodwill recognized in purchase)
2,060,000
Current liabilities
(700,000 )
Long-term liabilities
(500,000 )
Net assets
$1,270,000
Finally, it is determined that the fair value of the Conchita Division is $1,850,000.
Your answer is correct.
Compute the amount of goodwill recognized, if any, on July 31, 2020. (If answer is zero, do not leave answer field blank. Enter O for the amount.)
MacBook Pro
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#3
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help_outline

Image Transcriptionclose

A Player O (1488) Example: Interest Capit x Grades for Preston Porter: ACC X Answered: Exercise 12-9Durin X + s.ucf.edu/courses/1336012/assignments/6285656 Other Current Attempt in Progress On July 31, 2020, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition. Current assets $730,000 Current liabilities $570,000 Noncurrent assets ort 2,400,000 Long-term liabilities 470,000 Total assets $3,130,000 Stockholders' equity 2,090,000 ces Total liabilities and stockholders' equity $3,130,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information. Current assets $410,000 Noncurrent assets (including goodwill recognized in purchase) 2,060,000 Current liabilities (700,000 ) Long-term liabilities (500,000 ) Net assets $1,270,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. Your answer is correct. Compute the amount of goodwill recognized, if any, on July 31, 2020. (If answer is zero, do not leave answer field blank. Enter O for the amount.) MacBook Pro DII F12 F11 F10 F9 F8 F7 F6 F3 F2 F5 F4 #3 & del 80 4. 3 2 { Y н MI + |/

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A Player
(1488) Example: Interest Capit X
Grades for Preston Porter: AC
Answered: Exercise 12-9During X
X
urses.ucf.edu/courses/1336012/assignments/6285656
Other Book
Your answer is incorrect.
Assume that fair value of the Conchita Division is $1,224,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded on
December 31, 2020. (If answer is zero, do not leave answer field blank. Enter O for the amount.)
$
The impairment loss
-199000
eTextbook and Media
List of Accpunts
Your answer is partially correct.
Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. (Credit
account titles are automatically indented when 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.)
Credit
Debit
Account Titles and Explanation
199000
Loss on Impairment
199000
Goodwill
Income From Continuing Operations
This loss will be reported in income as a separate line item before the subtotal
MacBook Pro
F12
F11
DII
F10
888
F7
F5
F4
F3
&
23
E
11
н
G
в
C
00
S.
help_outline

Image Transcriptionclose

A Player (1488) Example: Interest Capit X Grades for Preston Porter: AC Answered: Exercise 12-9During X X urses.ucf.edu/courses/1336012/assignments/6285656 Other Book Your answer is incorrect. Assume that fair value of the Conchita Division is $1,224,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded on December 31, 2020. (If answer is zero, do not leave answer field blank. Enter O for the amount.) $ The impairment loss -199000 eTextbook and Media List of Accpunts Your answer is partially correct. Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. (Credit account titles are automatically indented when 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.) Credit Debit Account Titles and Explanation 199000 Loss on Impairment 199000 Goodwill Income From Continuing Operations This loss will be reported in income as a separate line item before the subtotal MacBook Pro F12 F11 DII F10 888 F7 F5 F4 F3 & 23 E 11 н G в C 00 S.

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Expert Answer

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Step 1
  1. Compute the amount of goodwill:
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Considerati on paid- Fair value Goodwill = of the identi fiable net assets = $2,700,000 –- $2,455,000 = $245,000

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Step 2

2. Compute the impairment loss:

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[Fair value – Carrying Impairment loss = value of Net assets = $1,224,000 – $1,270,000 = $ – 46,000

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Step 3

3. Prepare the journal entry to record the impairment loss:

This loss will be reported in income as “income ...

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Post Debit Credit Account Titles and Description Date Ref. (S) $46,000 (S) Loss on Impairment December 31, 2019 Goodwill $46,000 (To record the impairment loss)

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