Advanced Financial Accounting
11th Edition
ISBN: 9780078025877
Author: Theodore E. Christensen, David M Cottrell, Cassy JH Budd Advanced Financial Accounting
Publisher: McGraw-Hill Education
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Question
Chapter 1, Problem 1.16E
a.
To determine
To identify: The amount of
Introduction: Goodwill impairment is computed in case fair value of reporting unit is lower than carrying value of net identifiable assets. Goodwill in case of impairment is computed by deducting fair value of net assets excluding goodwill from the fair value of reporting unit.
b.
To determine
To identify: The amount of goodwill impairment to be recognized.
Introduction: Goodwill impairment is computed in case fair value of reporting unit is lower than carrying value of net identifiable assets. Goodwill in case of impairment is computed by deducting fair value of net assets excluding goodwill from the fair value of reporting unit.
c.
To determine
To identify: The amount of goodwill impairment to be recognized.
Introduction: Goodwill impairment is computed in case fair value of reporting unit is lower than carrying value of net identifiable assets. Goodwill in case of impairment is computed by deducting fair value of net assets excluding goodwill from the fair value of reporting unit.
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Students have asked these similar questions
Accounting
On January 1, 20X1, Porta Corporation purchased Swick Company's net assets
and assigned goodwill of $81,500 to Reporting Division K. The following assets
and liabilities are assigned to Reporting Division K on the acquisition date:
Carrying Fair
Amount
Value
Cash
15,500
$ 15,500
Inventory
57,500
72,500
Equipment
185,000
205,000
Goodwill
81,500
Accounts
31,500
31,500
Payable
Required:
On December 31, 20X3, Porta must test goodwill for impairment. Determine the
amount of goodwill to be reported for Division K and the amount of goodwill
impairment to be recognized, if any, if Division K's fair value is determined to be
$355,000.
$295,000.
$275,000.
Eliminating Entries, Goodwill
Polaris Company acquires all of the stock of SSC, Inc. for $60 million in cash. At the date of
acquisition, SSC's current assets had a book value of $20 million, its noncurrent assets had a
book value of $80 million, and its liabilities had a book value of $90 million. It is determined
that the book values of SSC's net assets approximate fair value at the date of acquisition. SSC's
shareholders' equity consists of capital stock of $2 million, retained earnings of $9 million
(credit balance), and treasury stock of $1 million.
Required
Prepare the eliminating entries necessary to consolidate the balance sheet accounts of Polaris
and SSC at the date of acquisition.
Enter answers in millions.
Description
Ref.
(E) Capital stock
(R)
Investment in SSC
¶
Debit
Credit
After the business combination on the basis of full-goodwill approach, what amount of total assets will be reported? (Use only the given information)
a. P1,081,000
b. P1,121,000
c. P1,196,500
d. P1,231,500
Chapter 1 Solutions
Advanced Financial Accounting
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