INTERMEDIATE ACCOUNTING
10th Edition
ISBN: 9781265246853
Author: SPICELAND
Publisher: PEARSON
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Chapter 11, Problem 11.20BE
To determine
Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company.
Impairment of Goodwill:
It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s
To Determine: The amount of the impairment loss which Incorporation W should recognize.
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Students have asked these similar questions
H~3&500
1
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6
Required:
Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the Plastic reporting
8 unit is determined to be
9
10 a.
11 b.
12 c.
13
14
7
Rubber Corporation acquired all of the common stock of Plastic Company for $450,000 on January 1, 20X4. On that date, Plastic's identifiable net assets had a fair
value of $390,000. The assets acquired in the purchase of Plastic are considered to be a separate reporting unit of Rubber. The carrying value of the Plastic reporting
unit's net assets at December 31, 20X4, is $500,000.
20
15 a.
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b.
17 C.
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19 Step 1: For Goodwill Impairment Testing
26
530000
485000
450000
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28
29 C.
30
31
Goodwill
Impairment
60000
a.
b.
Fair Value of
Reporting
Unit
21 a.
22
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23 C.
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25 Step 2: For Goodwill Impairment Testing
Carrying
Value of
Reporting
Unit
Fair Value -
Carrying
Value
Fair Value of Fair Value of
Reporting Indentifiable
Unit
Assets
Impairment
Indicated
(Yes/No)
No…
Required information
Exercise 11-31 (Algo) Impairment; goodwill [LO11-8]
[The following information applies to the questions displayed below.]
In 2019, Alliant Corporation acquired Centerpoint Inc. for $370 million, of which $60 million was allocated to goodwill. At
the end of 2021, management has provided the following information for a required goodwill impairment test:
Fair value of Centerpoint Inc.
Book value of Centerpoint's net assets (excluding goodwill)
Book value of Centerpoint's net assets (including gobdwill)
$282 million
250 million
310 million
Exercise 11-31 (Algo) Part 1
Required:
1. Determine the amount of the impairment loss. (Enter your answer in millions (i.e., 10,000,000 should be entered as 10)).
Answer is complete but not entirely correct.
Impairment loss
$ 488 million
Exercise 10-6 (Algo) Goodwill (LO10-1]
On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $18,500,000 in cash.
The book values and fair values of Barney's assets and liabilities were as follows:
Book Value
Fair Value
Current assets
$ 7,500,000
12,500,000
1,150,000
5,500,000
7,500,000
Property, plant, and equipment
Other assets
$ 9,000,000
15,500,000
Current liabilities
Long-term liabilities
1,650,000
5,500,000
7,000,000
Required:
Calculate the amount paid for goodwillI.
* Answer is complete but not entirely correct.
Goodwill
$ 20,150,000 x
Chapter 11 Solutions
INTERMEDIATE ACCOUNTING
Ch. 11 - Prob. 11.1QCh. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Briefly explain the differences and similarities...Ch. 11 - Prob. 11.12QCh. 11 - Prob. 11.13QCh. 11 - What are some of the simplifying conventions a...Ch. 11 - Explain the accounting treatment required when a...Ch. 11 - Explain the accounting treatment and disclosures...Ch. 11 - Explain the steps required to correct an error in...Ch. 11 - Prob. 11.18QCh. 11 - Prob. 11.19QCh. 11 - Prob. 11.20QCh. 11 - Prob. 11.21QCh. 11 - Briefly explain the differences between U.S. GAAP...Ch. 11 - Under U.S. GAAP, litigation costs to successfully...Ch. 11 - Cost allocation At the beginning of its fiscal...Ch. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.8BECh. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Prob. 11.13BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.18BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.20BECh. 11 - Prob. 11.21BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Prob. 11.4ECh. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Prob. 11.10ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Prob. 11.26ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.30ECh. 11 - Prob. 11.31ECh. 11 - Prob. 11.32ECh. 11 - Prob. 11.33ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.35ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - Depreciation methods; change in methods LO112,...Ch. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.12PCh. 11 - Prob. 11.14PCh. 11 - Analysis Case 111 Depreciation, depletion, and...Ch. 11 - Communication Case 112 Depreciation LO111 At a...Ch. 11 - Judgment Case 113 Straight-line method; composite...Ch. 11 - Prob. 11.4DMPCh. 11 - Prob. 11.8DMPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Prob. 11.11DMPCh. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16DMPCh. 11 - Target Case LO112, LO118, LO119 Target...
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