AccountingOn January 1, 20X1, Porta Corporation purchased Swick Company's net assetsand assigned goodwill of $81,500 to Reporting Division K. The following assetsand liabilities are assigned to Reporting Division K on the acquisition date:Carrying FairAmountValueCash15,500$ 15,500Inventory57,50072,500Equipment185,000205,000Goodwill81,500Accounts31,50031,500PayableRequired:On December 31, 20X3, Porta must test goodwill for impairment. Determine theamount of goodwill to be reported for Division K and the amount of goodwillimpairment to be recognized, if any, if Division K's fair value is determined to be$355,000.$295,000.$275,000.

Concept of impairment of assets Details Available Testing Good will for impairment…

On January 1, 20X1, Porta Corporation purchased Swick Company's net assets and assigned goodwill of $81,500 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date: Carrying Fair Amount Value Cash 15,500 $ 15,500 Inventory 57,500 72,500 Fguinment 185.000 205.000 %24

On January 1, 20X1, Porta Corporation purchased Swick Company's net assets and assigned goodwill of $81,500 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date: Carrying Fair Amount Value Cash 15,500 $ 15,500 Inventory 57,500 72,500 Fguinment 185.000 205.000 %24

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Accounting
On January 1, 20X1, Porta Corporation purchased Swick Company's net assets
and assigned goodwill of $81,500 to Reporting Division K. The following assets
and liabilities are assigned to Reporting Division K on the acquisition date:
Carrying Fair
Amount
Value
Cash
15,500
$ 15,500
Inventory
57,500
72,500
Equipment
185,000
205,000
Goodwill
81,500
Accounts
31,500
31,500
Payable
Required:
On December 31, 20X3, Porta must test goodwill for impairment. Determine the
amount of goodwill to be reported for Division K and the amount of goodwill
impairment to be recognized, if any, if Division K's fair value is determined to be
$355,000.
$295,000.
$275,000.

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