EBK ADVANCED FINANCIAL ACCOUNTING
11th Edition
ISBN: 8220102796096
Author: Christensen
Publisher: YUZU
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Question
Chapter 1, Problem 1.18E
a.
To determine
To calculate: The amount of
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
b.
To determine
To calculate: The amount of goodwill, when fair value of the reporting unit is $540,000.
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
c.
To determine
To calculate: The amount of goodwill, when fair value of the reporting unit is $500,000.
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
d.
To determine
To calculate: The amount of goodwill, when fair value of the reporting unit is $460,000.
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
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Students have asked these similar questions
What should be the carrying value of goodwill for reporting unit A at
year - end? What should be the carrying value of goodwill for
reporting unit D at year-end ? What impairment loss should
reporting unit B report for the year?\table [[Reporting Unit, A, B, C, D
Reporting Unit
Carrying Value of reporting unit
Goodwill included in carrying value
Fair Value of net identifiable assets at year-end
Fair Value of reporting unit at year-end
G
A
$600,000
$60,000
$600,000
$590,000
B
C
$330,000
$520,000
$48,000
$40,000
$300,000
$500,000
$305,000 $585,000
D
$380,000
$28,000
$375,000
$400,000
Naughty Company assembles the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill:
Assets at fair value before goodwill 2, 600, 000Liabilities 900, 000Shareholders’ equity 1, 700, 000
Net earnings after elimination of unusual or infrequent items:2008 200, 0002009 230, 0002010 300, 0002011 250, 0002012 270, 000
Required:Calculate the amount of goodwill under the following:1. Average earnings are capitalized at 10%2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%.3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings.4. A return of 10% is considered normal on net assets at fair value. Excess earnings are expected to…
Topic: Intangible Assets (Goodwill)
England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill:
Assets at fair value before goodwill 2,600,000
Liabilities 900,000
Shareholders' Equity 1,700,000
Net Earnings after elimination of unusual or infrequent items:
2017 200,000
2018 230,000
2019 300,000
2020 250,000
2021 270,000
Required:
Calculate the amount of goodwill under the following:
1. Average earnings are capitalized at 10%.
2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%.
3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings.
4. A return of 10% is considered…
Chapter 1 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10QCh. 1 - Prob. 1.11Q
Ch. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.17QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.8CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Prob. 1.4.4ECh. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Prob. 1.11ECh. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Prob. 1.27PCh. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Prob. 1.32PCh. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
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Similar questions
- Following is information about the reporting unit of Y company as of 12/31/19 The fair value of the reporting unit of Y company is $310,000 and the fair value of identifiable net assets excluding goodwill is $270,000. The total carrying value of the unit is $320,000. The carrying value of identifiable net assets excluding goodwill is $260,000. The carrying value of goodwill is $60,000. Required: compute the goodwill impairment loss if any for 2019. Show work $10,000 $20.000 $40,000 $0arrow_forwardSimon Company determines that its goodwill is impaired. It finds that the book value of its reporting unit is $1,490,000, including recorded goodwill of $400,000. The fair value of the identifiable assets of the reporting unit is $1,450,000. What is the amount of goodwill impaired?arrow_forwardEngland Company assembled the following data relative to o certain entity in determining the amount to be paid for net assets and goodwill: 2,600,000 Assets at fair value before goodwill Liabilities 1,700,000 Shareholders' equity Net earnings after elimination of unusual or infrequent items: 200,000 230,000 300,000 250,000 270,000 2018 2019 thucms 2020 2021 Required: Calculate the amount of goodwill under the following: 1. Average earnings are capitalized at 10%. 2. A return of 8% is considered normal on net assets at far value. Excess earnings are capitalized at 15%. 3. A return of 10% is considered normal on net assets at fau value. Goodwill is measured at 5 years excess earnings. Goodwill is measured by the present value method using 12% rate. The present value of an ordinary annuity of 12% for 10 years is 5.65.arrow_forward
- Determine whether there is any goodwill impairment and if so please calculate the goodwill impairment loss. On the date of acquisition, the following information is available: Fair Value of the reporting unit is $720,000 Fair Value of identifiable net assets $601,000 Goodwill $119,000 One year later at the first periodic review date the following information is available: Fair value of the reporting unit is $788,000 Carrying value of the reporting unit (includes goodwill) $889,000 Fair Value of identifiable net assets $766,000 $22,000arrow_forwardOn December 31, an entity had a reporting unit that had a book value of $3,450,000, including goodwillof $225,000. As part of its annual review of goodwill impairment, the entity determined that the fair value of the reporting unit was $3,310,000. The entity assigned $3,170,000 of the reporting units fair value to its assets and liabilities other than goodwill. What is the goodwill impairment loss to be reported on December 31 under the new standardarrow_forwardWhich 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.arrow_forward
- With respect to goodwill related to acquisition, an impairment is a one-step process considering the entire entity O is a two-step process which analyses each business reporting unit of the entity. will be amortized over the remaining useful life of the asset occurs when asset values are adjusted to fair value in an acquisition. roblems surge onarrow_forwardWhich of the following properly describes the accounting for goodwill? Multiple Choice Goodwill is amortized over its useful life. Goodwill is the difference between the amount paid for a company relative to the book value of the acquired company's net assets. Goodwill is written down when it has been determined to be impaired. Goodwill is recorded when it is internally generated.arrow_forwardKonopelski Corporation purchased McKenzie Company 3 years ago and at that time recorded goodwill of $755,000. The Division's net assets, including the goodwill, have a carrying amount of $1,754,000. The fair value of the division is estimated to be $1,001,000. PART A Account No Journal Entry Required PART B What is the carrying amount of goodwill after your assessment in Part A? $ Debit Creditarrow_forward
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