In 2019, Quasar Ltd. acquired all of the common stock of Penlight Laser for $124 million. The fair value of Penlight's identifiable tangible and intangible assets totaled $205 million, and the fair value of liabilities assumed by Quasar was $95 million. Quasar performed a required goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Penlight (reporting unit) Fair value of Penlight's net assets (excluding goodwill) Book value of Penlight's net assets (including goodwill) Present value of Penlight's estimated future cash flows $115 million 107 million 125 million 110 million Required: 1.) Determine the amount of goodwill impairment loss in 2021. 2.) What will the goodwill balance be (after any impairment loss is recorded)?

In 2019, Quasar Ltd. acquired all of the common stock of Penlight Laser for $124 million. The fair value of Penlight's identifiable tangible and intangible assets totaled $205 million, and the fair value of liabilities assumed by Quasar was $95 million. Quasar performed a required goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Penlight (reporting unit) Fair value of Penlight's net assets (excluding goodwill) Book value of Penlight's net assets (including goodwill) Present value of Penlight's estimated future cash flows $115 million 107 million 125 million 110 million Required: 1.) Determine the amount of goodwill impairment loss in 2021. 2.) What will the goodwill balance be (after any impairment loss is recorded)?

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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