Exercise 148 On July 1, 2017, Vinson Corporation acquired Carley Company for $90

Question

Exercise 148 On July 1, 2017, Vinson Corporation acquired Carley Company for $900,000 cash. At the time of purchase, Carley's balance sheet showed assets of $775,000 and liabilities of $250,000. The fair value of Carley's assets is estimated to be $950,000 Compute the amount of goodwill acquired by Vinson Amount of goodwill SHOW LIST OF ACCOUNTS On December 31, the fair value of Carley is estimated to be $720,000 and the implied fair value of goodwill is $170,000. The carrying value of Carley's net assets, including the goodwill, at year- end is $750,000. Prepare Vinson's journal entry, if necessary, to record impairment of goodwill. (Credit account titles are automatically indeted when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS

Explanation / Answer

1 Purchase price 900000 Fair value of assets 950000 Fair value of liabilities -250000 Fair value of net assets 700000 Goodwill 200000 2 Loss on impairment 30000 =750000-720000         Goodwill 30000

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