Fast owns 100% of Slow and had recorded $700,000 of goodwill from acquiring Slow many years ago. It is now 3 years later and the fair value of Slow is $1,300,000 and the book value of Slow inclusive of goodwill is $1,100,000. The implied value of goodwill is $650,000 and the book value of goodwill continues to be $700,000. What is the amount of goodwill impairment, if any. 2. Assume same facts as part a. except that the fair value of Slow is $900,000 instead of $1,300,000. What is the amount of goodwill impairment, if any.

Fast owns 100% of Slow and had recorded $700,000 of goodwill from acquiring Slow many years ago. It is now 3 years later and the fair value of Slow is $1,300,000 and the book value of Slow inclusive of goodwill is $1,100,000. The implied value of goodwill is $650,000 and the book value of goodwill continues to be $700,000. What is the amount of goodwill impairment, if any. 2. Assume same facts as part a. except that the fair value of Slow is $900,000 instead of $1,300,000. What is the amount of goodwill impairment, if any.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 19E

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a. Fast owns 100% of Slow and had recorded $700,000 of goodwill from acquiring Slow many years ago. It is now 3 years later and the fair value of Slow is $1,300,000 and the book value of Slow excluding of goodwill is $1,100,000. B. b. Assume same facts as part a. except that the fair value of Slow is $900,000 instead of $1,300,000. What is the amount of goodwill impairment, if any (use 2020 rules).
Shaw owns 80% of Gorman. The following information is available: Consolidated Goodwill is $325,000. The fair value of the controlling interest is $700,000 The fair value of the noncontrolling interest is $225,000 The fair value of 100% of Gorman net assets acquired is $600,000 How much Goodwill is allocated to the noncontrolling interest
Angry Co. acquired a 20% interest in Misery Co many years ago. On January 1, 20x1, Angry acquired an additional 40% interest in Misery for P300,000. On this date, Misery's net identifiable assets have a fair value of 690,000, and Angry's PHI has a carrying value of P128,000 and a fair value of P138,000. Angry opted to measure the NCI at 'proportionate share. How much is the goodwill? Record the transaction if the PHI was classified as Investment in Associate Record the transaction if the PHI was classified as FVOCI
Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $100,000 related to the purchase. Since that timethe company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $800,000. Blaha estimates that the fair value of Husker is $720,000, of which it allocates $660,000 to Husker, identifiable assets and liabilities. 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be…
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Peter, Incorporated owns 100% of The Rock Company. The book value of the Goodwill is $300,000. When Peter made its investment, The Rock had a fair value of $2,800,000. Today, the value of The Rock has fallen to $2,250,000. An appraisal of The Rock’s net assets reveals a fair value of $2,075,000. How much “impairment” should Peter record related to its investment in The Rock?
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Joey Corporation acquired 100 percent of Legoria Company’s common stock on January 1, 2021 for cash paying $132,000. At that date, the fair value of Legoria’s Buildings and Equipment was $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Joey CO. concluded on December 31, 2021, that the goodwill involved in the acquisition of Legoria Co. shares has been impaired and the correct carrying value was $4,000. Trial balance data for Joey Co and Legoria Co. are presented above. NOTE that this Trial balance uses Accumulated Depreciation which would need to accounted for in your entries. Required: 1). Give all of the journal entries that Joey Co. would make on “ITS” books to account for its investment in Legoria Co. using the Full Equity Method. 2). Give all of the Consolidation [Elimination entries] needed to prepare Consolidated Financial Statements for the year ended December 31, 2021 and…
Ryan Limited acquired 80% of the shares in Tully Limited for $165 000. At acquisition date, share capital in Tully was $120 000 and reserves amounted to $40 000. All assets and liabilities of Tully were recorded at fair value at acquisition date except machinery which was recorded at $20 000 below fair value. The fair value of the NCI at the date of Ryan’s acquisition was $40 000 and the full goodwill method is adopted by the group. If the company tax rate was 30%, the total amount of goodwill recorded in relation to this business combination amounts to: a. $15 000 b. $31 000 c. $5 000 d. $26