26. On January 1, 2022, Campbell Corp. purchases 100% of Manning Inc. for $9.6 million. At the time of acquisition, the fair market value of Manning's tangible net assets (excluding goodwill) is $7.9 million. Campbell ascribes the excess of $1,700,000 to goodwill. During the year the fair value of Manning declines to $8.0 million and the fair value of Manning's tangible net assets is estimated at $6.8 million as of December 31, 2022. a. Determine if the goodwill has become impaired and, if so, the amount of the impairment. b. What impact does the impairment of goodwill have on Campbell Corp's financial statements?

26. On January 1, 2022, Campbell Corp. purchases 100% of Manning Inc. for $9.6 million. At the time of acquisition, the fair market value of Manning's tangible net assets (excluding goodwill) is $7.9 million. Campbell ascribes the excess of $1,700,000 to goodwill. During the year the fair value of Manning declines to $8.0 million and the fair value of Manning's tangible net assets is estimated at $6.8 million as of December 31, 2022. a. Determine if the goodwill has become impaired and, if so, the amount of the impairment. b. What impact does the impairment of goodwill have on Campbell Corp's financial statements?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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