**Goodwill****Scenario:**Sunshine, Corp purchased Cloudy Company for $400,000 cash when Cloudy had net assets worth $390,000.**Required**1. **Determine the amount of goodwill in this transaction.** - **Goodwill:** 2. **Record the entry for the purchase of Cloudy Company.** - **General Journal** | | DR | CR | |---|----|----| | | | |3. **Assume in the year following the purchase, Sunshine during impairment testing determines that goodwill is worth $4,000. Record the necessary entry for the impairment loss.** - **General Journal** | | DR | CR | |---|----|----| | | | |

Determine the amount of Goodwill: Goodwill = Cash paid for the purchase - Net worth of assets…

Goodwill Sunshine, Corp purchased Cloudy Company for $400,000 cash when Cloudy had net assets worth $390,000. Required 1 Determine the amount of goodwill in this transaction. Goodwill 2 Record the entry for the purchase of Cloudy Company, Page 1 General Journal DR CR 3 Assume in the year following the purchase Sunshine during impairment testing determines that goodwill is worth $4,000. Record the necessary entry for the impairment loss. General Journal DR CR

Goodwill Sunshine, Corp purchased Cloudy Company for $400,000 cash when Cloudy had net assets worth $390,000. Required 1 Determine the amount of goodwill in this transaction. Goodwill 2 Record the entry for the purchase of Cloudy Company, Page 1 General Journal DR CR 3 Assume in the year following the purchase Sunshine during impairment testing determines that goodwill is worth $4,000. Record the necessary entry for the impairment loss. General Journal DR CR

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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