On January 1, 2010, P Company acquired the net assets of S Company for $1,580,000 cash. The fair value of S Co. identifiable net assets was $1,310,000 on this date. P Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (S Co.). The information for these subsequent years is as follows: Carrying value of SCo. Identifiable Net Assets $1,160,000 Fair Value SCo. identifiable Net Assets Present value Year _of Future Cash Flows 2011 $1,190,000 $1,190,000 2012 $1,400,000 $1,120,000 $1,210,000 * Identifiable net assets do not include goodwill.

On January 1, 2010, P Company acquired the net assets of S Company for $1,580,000 cash. The fair value of S Co. identifiable net assets was $1,310,000 on this date. P Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (S Co.). The information for these subsequent years is as follows: Carrying value of SCo. Identifiable Net Assets $1,160,000 Fair Value SCo. identifiable Net Assets Present value Year _of Future Cash Flows 2011 $1,190,000 $1,190,000 2012 $1,400,000 $1,120,000 $1,210,000 * Identifiable net assets do not include goodwill.

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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