On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for million. The fair value of Harman's identifiable tangible and intangible assets totaled $540 million, and the fair val liabilities assumed by Pesky was $180 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Managemen provided the following information: Fair value of Harman, Incorporated Fair value of Harman's net assets (excluding goodwill) 375 Book value of Harman's net assets (including goodwill) 458 $ 440 million million million

On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for million. The fair value of Harman's identifiable tangible and intangible assets totaled $540 million, and the fair val liabilities assumed by Pesky was $180 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Managemen provided the following information: Fair value of Harman, Incorporated Fair value of Harman's net assets (excluding goodwill) 375 Book value of Harman's net assets (including goodwill) 458 $ 440 million million million

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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Question

On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for $460
million. The fair value of Harman's identifiable tangible and intangible assets totaled $540 million, and the fair value of
liabilities assumed by Pesky was $180 million.
Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Management has
provided the following information:
Fair value of Harman, Incorporated
$ 440 million
Fair value of Harman's net assets (excluding goodwill) 375
Book value of Harman's net assets (including goodwill) 458
million
million
Required:
1. Determine the amount of goodwill that resulted from the Harman acquisition.
2. Determine the amount of goodwill impairment loss that Pesky should recognize at the end of 2024, if any.
3. If an impairment loss is required, prepare the journal entry to record the loss.

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