Armstrong Company acquired Hall Corporation in 2015 and recognized the goodwill of $700,000. Before 2017, Armstrong Company didn't recognize any goodwill impairment for the cash generating unit of Hall Corp. At December 31, 2017, the division of Hall Corp. reports the following information for its annual goodwill impairment test (after all other necessary adjustments such as depreciation expenses of long-term tangible assets): Fair value of Hall Corp. less costs-to-sell $1,400,000 Book value of Hall Corp. net assets (including the goodwill of $700,000). $2,000,000 Present value of estimated future cash flows from Hall Corp. $1,200,000 Required: (a) Prepare the journal entry to record the goodwill impairment loss. (b) Assume that the fair value of Hall Corp less costs-to-sell is $1,100,000 instead of $1,400,000. Please prepare the journal entry to record the goodwill impairment. For this journal entry, if it is necessary, please use "Assets" account to represent the general assets of Hall Corp assets. Show necessary calculation.

Armstrong Company acquired Hall Corporation in 2015 and recognized the goodwill of $700,000. Before 2017, Armstrong Company didn't recognize any goodwill impairment for the cash generating unit of Hall Corp. At December 31, 2017, the division of Hall Corp. reports the following information for its annual goodwill impairment test (after all other necessary adjustments such as depreciation expenses of long-term tangible assets): Fair value of Hall Corp. less costs-to-sell $1,400,000 Book value of Hall Corp. net assets (including the goodwill of $700,000). $2,000,000 Present value of estimated future cash flows from Hall Corp. $1,200,000 Required: (a) Prepare the journal entry to record the goodwill impairment loss. (b) Assume that the fair value of Hall Corp less costs-to-sell is $1,100,000 instead of $1,400,000. Please prepare the journal entry to record the goodwill impairment. For this journal entry, if it is necessary, please use "Assets" account to represent the general assets of Hall Corp assets. Show necessary calculation.

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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