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 liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 Tangible assets $181,000 RU-2 $246,000 RU-3 $186,000 Trademark 197,000 Customer list 138,000 Unpatented technology 234,000 Licenses 91,500 Copyrights 73,500 Goodwill Liabilities 186,600 206,950 134,500 (44,500) The total fair values for each reporting unit (including goodwill) are $632,700 for RU-1, $743,050 for RU-2, and $748,750 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? RU-1 Goodwill impairment loss RU-2 RU-3
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 liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 Tangible assets $181,000 RU-2 $246,000 RU-3 $186,000 Trademark 197,000 Customer list 138,000 Unpatented technology 234,000 Licenses 91,500 Copyrights 73,500 Goodwill Liabilities 186,600 206,950 134,500 (44,500) The total fair values for each reporting unit (including goodwill) are $632,700 for RU-1, $743,050 for RU-2, and $748,750 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? RU-1 Goodwill impairment loss RU-2 RU-3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 liability carrying amounts for each of
its reporting units:
Carrying Amounts
RU-1
Tangible assets
$181,000
RU-2
$246,000
RU-3
$186,000
Trademark
197,000
Customer list
138,000
Unpatented technology
234,000
Licenses
91,500
Copyrights
73,500
Goodwill
Liabilities
186,600
206,950 134,500
(44,500)
The total fair values for each reporting unit (including goodwill) are $632,700 for RU-1, $743,050 for RU-2, and $748,750 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?
RU-1
Goodwill impairment loss
RU-2
RU-3
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