General Products Company bought Special Products Division in 2014 and appropriat

Question

General Products Company bought Special Products Division in 2014 and appropriately recorded $750,000 of goodwill related to the purchase. On December 31, 2015, the fair value of Special Products Division is $6,000,000 and it is carried on General Product's books for a total of $5,100,000, including the goodwill. An analysis of Special Products Division's assets indicates that goodwill of $600,000 exists on December 31, 2015. What goodwill impairment should be recognized by General Products in 2015? $75,000. $300,000. $450,000. $0.

Explanation / Answer

Answer: $0

Because (750000-600000) is less than (6000000-5100000)

=150000 is less than 900000

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