On September 1, 2018. Vernon Corporation acquired Barlow Enterprises for a cash payment of 5820.000. At the time of purchases. Barlow'S balance sheet showed assets of $610.000. liabilities of $240.000, and owner's equity of $420.000. The fair value of Barlow's assets is estimated to be 5970.000.The liabilities are all estimated to be at fair value. a) Compute the amount of goodwill acquired by Vernon. 120000 b) On December 31, 2020, the fair value of Barlow as a reporting unit is estimated to be $720.000. The carrying value of Vernon's investment in Barlow at year-end is $750.000. The fair value of Barlow's identifiable net asset, excluding the goodwill, is determined to be 655.000 Prepare Vernon's journal entry, if necessary, to record impairment of goodwill. Please use the new standard (Hint: The FASa's new goodwill Impairment testing guidance-ASU 2017-04 is required for public SEC filers for periods beginning after December 15, 2019) Note: Please use integer only. Do not use a S. Use commas in numbers: 3,000 not 3000.

On September 1, 2018. Vernon Corporation acquired Barlow Enterprises for a cash payment of 5820.000. At the time of purchases. Barlow'S balance sheet showed assets of $610.000. liabilities of $240.000, and owner's equity of $420.000. The fair value of Barlow's assets is estimated to be 5970.000.The liabilities are all estimated to be at fair value. a) Compute the amount of goodwill acquired by Vernon. 120000 b) On December 31, 2020, the fair value of Barlow as a reporting unit is estimated to be $720.000. The carrying value of Vernon's investment in Barlow at year-end is $750.000. The fair value of Barlow's identifiable net asset, excluding the goodwill, is determined to be 655.000 Prepare Vernon's journal entry, if necessary, to record impairment of goodwill. Please use the new standard (Hint: The FASa's new goodwill Impairment testing guidance-ASU 2017-04 is required for public SEC filers for periods beginning after December 15, 2019) Note: Please use integer only. Do not use a S. Use commas in numbers: 3,000 not 3000.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 30E

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