Levi and Peter's Athletic Emporium (LPAE) provided the following information. Fair value of the reporting unit, including goodwill $500 Fair value of the net assets, excluding goodwill $400 Book value of net assets, excluding goodwill $600 Add: Book value
Levi and Peter's Athletic Emporium (LPAE) provided the following information. Fair value of the reporting unit, including goodwill $500 Fair value of the net assets, excluding goodwill $400 Book value of net assets, excluding goodwill $600 Add: Book value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Levi and Peter's Athletic Emporium (LPAE) provided the following information.
|
Fair value of the reporting unit, including
|
$500
|
|
Fair value of the net assets, excluding goodwill
|
$400
|
|
Book value of net assets, excluding goodwill
|
$600
|
|
Add: Book value of goodwill
|
300
|
|
Book value of the reporting unit, including goodwill
|
$900
|
Note that LPAE performs the quantitative test on at least an annual basis. The qualitative assessment of goodwill reveals that it is more likely than not that the goodwill is impaired. Is there a goodwill impairment loss? Prepare any required journal entries.
Requirements:
Conduct the impairment test for goodwill at the end of the year.
Record any impairment loss on the goodwill
Record any impairment loss on the goodwill
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