Practical Corporation acquired all of the common stock of Simple Company for $450,000 on January 1, 20X4. On that date, Simple's identifiable net assets had a fair value of $390,000. The assets acquired in the purchase of Simple are considered to be a separate reporting unit of Practical. The carrying value of the Simple reporting unit's net assets at December 31, 20X4, is $500,000. Required: Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the Simple reporting unit is determined to be a. $530,000. b. $485,000. c. $450,000. a. b. C. Goodwill Impairment
Practical Corporation acquired all of the common stock of Simple Company for $450,000 on January 1, 20X4. On that date, Simple's identifiable net assets had a fair value of $390,000. The assets acquired in the purchase of Simple are considered to be a separate reporting unit of Practical. The carrying value of the Simple reporting unit's net assets at December 31, 20X4, is $500,000. Required: Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the Simple reporting unit is determined to be a. $530,000. b. $485,000. c. $450,000. a. b. C. Goodwill Impairment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Practical Corporation acquired all of the common stock of Simple Company for $450,000 on January 1, 20X4. On that date, Simple's
identifiable net assets had a fair value of $390,000. The assets acquired in the purchase of Simple are considered to be a separate
reporting unit of Practical. The carrying value of the Simple reporting unit's net assets at December 31, 20X4, is $500,000.
Required:
Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the Simple
reporting unit is determined to be
a. $530,000.
b. $485,000.
c. $450,000.
a.
b.
C.
Goodwill
Impairment
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