Preview Work It is determined that the fair market value of the Dryer division is $1,250,000. The recorded amount for Dryer's net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value of $150,000 above the carrying value. Instructions: (a) Compute the amount of goodwill recognized, if any, on May 31, 2004. (b) Determine the impairment loss, if any, to be recorded on December 31. 2004. (c) Assume that the fair value of the Dryer division is $1 100 000 instead of $1,250,000. Prepare the journal entry to record the impairment loss, if any on December 31, 2004,

Preview Work It is determined that the fair market value of the Dryer division is $1,250,000. The recorded amount for Dryer's net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value of $150,000 above the carrying value. Instructions: (a) Compute the amount of goodwill recognized, if any, on May 31, 2004. (b) Determine the impairment loss, if any, to be recorded on December 31. 2004. (c) Assume that the fair value of the Dryer division is $1 100 000 instead of $1,250,000. Prepare the journal entry to record the impairment loss, if any on December 31, 2004,

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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