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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 c its reporting units: Tangible assets Trademark Customer list Unpatented technology Licenses Copyrights Goodwill Liabilities Carrying Amounts RU-2 RU-3 RU-1 $232,000 $275,000 $206,250 193,000 154,000 166,550 (45,000) 189,000 130,000 153,500 55,000 92,500 The total fair values for each reporting unit (including goodwill) are $674,350 for RU-1, $720,400 for RU-2, and $765,650 for RU-3. To date, Purchase has reported no goodwill impairments.

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 c its reporting units: Tangible assets Trademark Customer list Unpatented technology Licenses Copyrights Goodwill Liabilities Carrying Amounts RU-2 RU-3 RU-1 $232,000 $275,000 $206,250 193,000 154,000 166,550 (45,000) 189,000 130,000 153,500 55,000 92,500 The total fair values for each reporting unit (including goodwill) are $674,350 for RU-1, $720,400 for RU-2, and $765,650 for RU-3. To date, Purchase has reported no goodwill impairments.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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: Tangible assets Trademark Customer list Unpatented technology Licenses Copyrights Goodwill Liabilities Goodwill impairment loss Carrying Amounts RU-2 RU-1 RU-3 $232,000 $275,000 $206,250 193,000 154,000 166,550 (45,000) RU-1 189,000 130,000 153,500 The total fair values for each reporting unit (including goodwill) are $674,350 for RU-1, $720.400 for RU-2, and $765,650 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? 55,000 92,500 RU-2 RU-3
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: Tangible assets Trademark Customer list Unpatented technology Licenses Copyrights Goodwill Liabilities Goodwill impairment loss Carrying Amounts RU-2 RU-1 RU-3 $232,000 $275,000 $206,250 193,000 154,000 166,550 (45,000) RU-1 189,000 130,000 153,500 The total fair values for each reporting unit (including goodwill) are $674,350 for RU-1, $720.400 for RU-2, and $765,650 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? 55,000 92,500 RU-2 RU-3
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