How many of the following statements regarding goodwillare true?• Goodwill is not reported unless purchased in an exchange.• Private companies can elect to amortize goodwill over10 years or less.• Impairment of goodwill results in a decrease in net income.a. None c. Twob. One d. Three

How many of the following statements regarding goodwillare true?• Goodwill is not reported unless purchased in an exchange.• Private companies can elect to amortize goodwill over10 years or less.• Impairment of goodwill results in a decrease in net income.a. None c. Twob. One d. Three

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions

Section: Chapter Questions

Problem 4BCRQ

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Which of the following statements is true regarding goodwill? a.Goodwill is amortized based on the lesser of the useful life or the legal life. b.Goodwill is the exclusive use of a name, term, or symbol used to identify a business or its product. c.If the purchase price of a business exceeds the fair value of its net assets, the excess is recorded as goodwill. d.Goodwill is amortized based on a 10-year period.
After the business combination on the basis of full-goodwill approach, what amount of liabilities will be reported? a. P265,000 b. P436,500 c. P622,000 d. P701,500
After the business combination on the basis of full-goodwill approach, what amount of goodwill will be reported? a. P 0 b. P28,000 c. P40,000 d. P52,000
Write down goodwill Goodwill was a result of a combination of activities in 2019. After an analysis, the following information relating to goodwill was determined: Goodwill - $675000 Value in use $603,000 Fair value less cost to sell $580,000 There is no Excel tab for goodwill – you can add a tab to show your calculations. Find if there is any impairment or not. Intangible Assets During 2020, a trademark and a patent were purchased. The intangible assets are amortized on a straight-line method. To test for impairment, the following items were determined regarding the trademark: Value in use $110,000 FV less costs to sell $115,500 In the Excel spreadsheet, see the tab “Intangible Assets” to perform any necessary calculations (I have attached the picture of the excel sheet) Analyze and review the following items and determine the appropriate journal entry. Record the journal entry
General Motors. In 2020, their Goodwill was 5230 and in 2021 it was 5087. Their goodwill is not amortized but tested for impairment annually. The testing determines whether it is more likely than not that an impairment exists. If it doesn’t exist then they do a quantitative impairment test, which carries out the amount of reporting of the amount of the unit exceeding its fair value. Goodwill on a balance sheet is the intangible assets that is created when a company acquires another company for a price more than its net asset value (Hargrave, 2022). I don’t feel they disclosed enough information for others to know about their goodwill. Their goodwill and intangible assets, net decreased from 2020 to 2021 which is the sum of the carrying amounts of the intangible assets on the balance sheet, net of the accumulated amortization and impairment charges. Do you agree? Please explain.
Under IASB for small and medium entities, goodwill: a. is subject to impairment procedures. b. is never adjusted. c. is amortized over ten years d. is not recorded in an acquisition.
1. ANEMONE Company engaged your services to compute the goodwill in the purchase of another company which provided the following: Net income Net assets 2018 P 2,000,000 P 7,800,000 2019 2,500,000 8,700,000 2020 3,900,000 9,000,000 Goodwill is measured by capitalizing excess earnings at 25% with normal on average net assets at 20% How much is the goodwill?
Goodwill Impairment On January 1, 20Y3, The Simmons Group, Inc., purchased the assets of NWS Insurance Co. for $39,457,500, a price reflecting an $5,918,625 goodwill premium. On December 31, 20Y9, The Simmons Group determined that the goodwill from the NWS acquisition was impaired and had a value of only $2,219,484. a. Determine the book value of the goodwill on December 31, 20Y9, prior to making the impairment adjustment.$fill in the blank 1 b. Illustrate the effects on the accounts and financial statements of the December 31, 20Y9, adjustment for the goodwill impairment. For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Balance Sheet Assets = Liabilities + Stockholders' Equity Goodwill + No effect = No effect + Retained Earnings 20Y9 Dec. 31. fill in the blank 6 fill in the blank 7 fill in the…
Which of the following is a requirment regarding replacement property for a deferred like kind exchange A Replacement proepty must be identified within 3 years before the transfer of the TP propery. B. The tax return for the year of the trnsfer mqy no be filed before the replacemnt property is acquired C the value of identified replacemnt properties may not exceed 500% the aggre
Assume a U.S. company decides to quantitatively test its goodwill for impairment. A division's book value exceeds its fair value by $8 million, and its goodwill has a book value of $10 million. The division's goodwill impairment loss is Select one: O O a. $10 million b. $0 c. $8 million d. $2 million
2-Assume that one of your clients asks for your assistance in allocating the $4,500,000 cost of a 100% acquisition of a competitor firm. You estimate the fair value of the net assets on the investee's balance sheet at $3,000,000. However, there is, in addition, an unrecorded trademark valued at $850,000. The intangible asset has an indefinite useful life. Required:a. What amount of goodwill will be recorded?b. What will be the effect of the goodwill and brand name on the annual income statement?c. Now assume that the agreement between the investor and investee calls for an additional payment of $500,000 contingent upon the investee reaching a certain level of income within three years. You estimate the fair value of the potential payment at $400,000. What effect, if any, does the potential payment have on the amount of goodwill recognized?
5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up 6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as A. Goodwill to be amortized periodically for 20 yearS. B. Expenses immediately C. Goodwill not subject to amortization but subject to impairment D. Goodwill to be amortized for 40 years 7.Under PFRS 3 (Business Combinations) A. Both direct and indirect costs are to be capitalized B. Both direct and indirect costs are to be expensed C. Direct costs are to be capitalized and indirect costs are to be expensed D. Indirect costs are to be capitalized and direct costs are to be expensed