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Impairment of Goodwill Instructions Chart of Accounts General Journal Instructions Next Level Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $102,000 related to the purchase. Since that time, the company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $765,000. Blaha estimates that the fair value of Husker is $710,000, of which it allocates $639,000 to Husker's identifiable assets and liabilities. Required: 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be $743,000. Prepare the journal entry for Blaha to record the impairment of its goodwill at the end of 2019.

Impairment of Goodwill Instructions Chart of Accounts General Journal Instructions Next Level Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $102,000 related to the purchase. Since that time, the company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $765,000. Blaha estimates that the fair value of Husker is $710,000, of which it allocates $639,000 to Husker's identifiable assets and liabilities. Required: 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be $743,000. Prepare the journal entry for Blaha to record the impairment of its goodwill at the end of 2019.

FINANCIAL ACCOUNTING
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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Impairment of Goodwill Instructions Chart of Accounts General Journal Next Level Instructions Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $102,000 related to the purchase. Since that time, the company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $765,000. Blaha estimates that the fair value of Husker is $710,000, of which it allocates $639,000 to Husker's identifiable assets and liabilities. Required: 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be $743,000. Prepare the journal entry for Blaha to record the impairment of its goodwill at the end of 2019.
Transcribed Image Text:Impairment of Goodwill Instructions Chart of Accounts General Journal Next Level Instructions Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $102,000 related to the purchase. Since that time, the company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $765,000. Blaha estimates that the fair value of Husker is $710,000, of which it allocates $639,000 to Husker's identifiable assets and liabilities. Required: 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be $743,000. Prepare the journal entry for Blaha to record the impairment of its goodwill at the end of 2019.
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