Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Purchase provides the following individual asset and liabili
Purchase Company recently acquired several businesses and recognized
In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units:
| Carrying Amounts | |||
| RU-1 | RU-2 | RU-3 | |
| Tangible assets | $214,000 | $295,000 | $207,750 |
| Trademark | 192,000 | ||
| Customer list | 110,250 | ||
| Unpatented technology | 183,000 | ||
| Licenses | 94,000 | ||
| Copyrights | 67,500 | ||
| Goodwill | 173,200 | 201,250 | 135,000 |
| Liabilities | (51,250) | ||
The total fair values for each reporting unit (including goodwill) are $613,000 for RU-1, $748,800 for RU-2, and $739,200 for RU-3. To date, Purchase has reported no goodwill impairments.
How much goodwill impairment should Purchase report this year for each of its reporting units?
-
$547,050.
-
$777,550.
-
$587,550.
-
$452,550.
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