Goodwill Impairment Buyer Company acquired Target Company on January 1. As part

Question

Goodwill Impairment

Buyer Company acquired Target Company on January 1. As part of the acquisition, $1,000 in goodwill was recognized; this goodwill was assigned to Buyer’s Manufacturing reporting unit. A qualitative assessment of general economic and industry conditions indicates that it is more likely than not that the fair value of the Manufacturing reporting unit is less than its net book value. On December 31, it was estimated that the future cash flows expected to be generated by the Manufacturing reporting unit are $350 at the end of each year for the next 10 years. The appropriate interest rate is 10%. The fair values and book values of the assets and liabilities of the Manufacturing reporting unit are as follows:

Make the journal entry necessary to recognize any goodwill impairment loss.

Click here to access the PV table to use with this problem.

Round intermediate dollar value calculations to the nearest dollar.

Explanation / Answer

Goodwill Impairment Buyer Company acquired Target Company on January 1. As part

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.