Pelota Company recently acquired several businesses and recognized goodwill in each acquisition. Pelota allocated the resulting goodwill to its three reporting units: R-one, R-two, and R-three. Pelota opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Pelota provides the following individual asset and liability carrying amounts for each of its reporting units: Items Carrying Amounts R-one R-two R-three Tangible assets $241,000 $219,000 $159,000 Trademark 199,000 - - Computer software 148,500 - - Unpatented technology - 232,000 - Licenses - 97,500 - Copyrights - - 57,250 Goodwill 150,200 202,850 118,000 Liabilities (32,250) - - The total fair values for each reporting unit (including goodwill) are $682,350 for R-one, $709,300 for R-two, and $653,650 for R-three. To date, Pelota has reported no goodwill impairments. Required: How much goodwill impairment should Pelota report this year for each of its reporting units?
Pelota Company recently acquired several businesses and recognized goodwill in each acquisition. Pelota allocated the resulting goodwill to its three reporting units: R-one, R-two, and R-three. Pelota opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Pelota provides the following individual asset and liability carrying amounts for each of its reporting units: Items Carrying Amounts R-one R-two R-three Tangible assets $241,000 $219,000 $159,000 Trademark 199,000 - - Computer software 148,500 - - Unpatented technology - 232,000 - Licenses - 97,500 - Copyrights - - 57,250 Goodwill 150,200 202,850 118,000 Liabilities (32,250) - - The total fair values for each reporting unit (including goodwill) are $682,350 for R-one, $709,300 for R-two, and $653,650 for R-three. To date, Pelota has reported no goodwill impairments. Required: How much goodwill impairment should Pelota report this year for each of its reporting units?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
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Problem 6MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense...
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Pelota Company recently acquired several businesses and recognized
In its current-year assessment of goodwill, Pelota provides the following individual asset and liability carrying amounts for each of its reporting units:
| Items | Carrying Amounts | ||
|---|---|---|---|
| R-one | R-two | R-three | |
| Tangible assets | $241,000 | $219,000 | $159,000 |
| Trademark | 199,000 | - | - |
| Computer software | 148,500 | - | - |
| Unpatented technology | - | 232,000 | - |
| Licenses | - | 97,500 | - |
| Copyrights | - | - | 57,250 |
| Goodwill | 150,200 | 202,850 | 118,000 |
| Liabilities | (32,250) | - | - |
The total fair values for each reporting unit (including goodwill) are $682,350 for R-one, $709,300 for R-two, and $653,650 for R-three. To date, Pelota has reported no goodwill impairments.
Required:
How much goodwill impairment should Pelota report this year for each of its reporting units?
Transcribed Image Text:Required:
How much goodwill impairment should Pelota report this year for each of its reporting units?
Goodwill impairment loss
R-one
R-two
$
R-three
0
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