On May 28, 2013. Pesky Corporation acquired all of the outstanding common stock

Question

On May 28, 2013. Pesky Corporation acquired all of the outstanding common stock of Harman, inc.. for $550 million. The fair value of Harman s 'identifiable tangible and intangible assets totaled $603 million, and the fair value of liabilities assumed by Pesky was S17? million. Pesky performed a good will impairment test at the end of its fiscal year ended December 31.2013. Management has provided the following information: Required: Determine the amount of good will that resulted from the Harman acquisition. (Enter your answer in millions.) Determine the amount of good will impairment loss that Pesky should recogn-2e at the end of 2013. lf any. (Enter your answers in millions.)

Explanation / Answer

1 Valuation of Goodwill Mio $ Fair Value of Asset 603 Less:- Fair Value of Liabilities 177 Net Value of Harman 426 Purchase value of Harman Inc 550 Goodwill 124 2 Impairment of Goodwill Mio $ Value of Harman as on 31.12.13 530 Purchase of Harman as on 28.05.13 550 Impairment of Goodwill 20

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