EBK ADVANCED FINANCIAL ACCOUNTING
11th Edition
ISBN: 8220102796096
Author: Christensen
Publisher: YUZU
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Question
Chapter 1, Problem 1.18E
a.
To determine
To calculate: The amount of
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
b.
To determine
To calculate: The amount of goodwill, when fair value of the reporting unit is $540,000.
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
c.
To determine
To calculate: The amount of goodwill, when fair value of the reporting unit is $500,000.
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
d.
To determine
To calculate: The amount of goodwill, when fair value of the reporting unit is $460,000.
Introduction: Goodwill is an intangible asset that specifies the market value of the company. It includes the company’s brand value, customer base and relation, and relationship with employees. It is not separately defined and has a contractual or legal right on the company.
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Students have asked these similar questions
What should be the carrying value of goodwill for reporting unit A at
year - end? What should be the carrying value of goodwill for
reporting unit D at year-end ? What impairment loss should
reporting unit B report for the year?\table [[Reporting Unit, A, B, C, D
Reporting Unit
Carrying Value of reporting unit
Goodwill included in carrying value
Fair Value of net identifiable assets at year-end
Fair Value of reporting unit at year-end
G
A
$600,000
$60,000
$600,000
$590,000
B
C
$330,000
$520,000
$48,000
$40,000
$300,000
$500,000
$305,000 $585,000
D
$380,000
$28,000
$375,000
$400,000
Topic: Intangible Assets (Goodwill)
England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill:
Assets at fair value before goodwill 2,600,000
Liabilities 900,000
Shareholders' Equity 1,700,000
Net Earnings after elimination of unusual or infrequent items:
2017 200,000
2018 230,000
2019 300,000
2020 250,000
2021 270,000
Required:
Calculate the amount of goodwill under the following:
1. Average earnings are capitalized at 10%.
2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%.
3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings.
4. A return of 10% is considered…
Simon Company determines that its goodwill is impaired. It finds that the book value of its reporting unit is $1,490,000, including recorded goodwill of $400,000. The fair value of the identifiable assets of the reporting unit is $1,450,000. What is the amount of goodwill impaired?
Chapter 1 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10QCh. 1 - Prob. 1.11Q
Ch. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.17QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.8CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Prob. 1.4.4ECh. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Prob. 1.11ECh. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Prob. 1.27PCh. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Prob. 1.32PCh. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
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Similar questions
- Following is information about the reporting unit of Y company as of 12/31/19 The fair value of the reporting unit of Y company is $310,000 and the fair value of identifiable net assets excluding goodwill is $270,000. The total carrying value of the unit is $320,000. The carrying value of identifiable net assets excluding goodwill is $260,000. The carrying value of goodwill is $60,000. Required: compute the goodwill impairment loss if any for 2019. Show work $10,000 $20.000 $40,000 $0arrow_forwardOn December 31, an entity had a reporting unit that had a book value of $3,450,000, including goodwillof $225,000. As part of its annual review of goodwill impairment, the entity determined that the fair value of the reporting unit was $3,310,000. The entity assigned $3,170,000 of the reporting units fair value to its assets and liabilities other than goodwill. What is the goodwill impairment loss to be reported on December 31 under the new standardarrow_forwardDetermine whether there is any goodwill impairment and if so please calculate the goodwill impairment loss. On the date of acquisition, the following information is available: Fair Value of the reporting unit is $720,000 Fair Value of identifiable net assets $601,000 Goodwill $119,000 One year later at the first periodic review date the following information is available: Fair value of the reporting unit is $788,000 Carrying value of the reporting unit (includes goodwill) $889,000 Fair Value of identifiable net assets $766,000 $22,000arrow_forward
- Which of the following statements is true regarding goodwill? a.Goodwill is amortized based on the lesser of the useful life or the legal life. b.Goodwill is the exclusive use of a name, term, or symbol used to identify a business or its product. c.If the purchase price of a business exceeds the fair value of its net assets, the excess is recorded as goodwill. d.Goodwill is amortized based on a 10-year period.arrow_forwardWith respect to goodwill related to acquisition, an impairment is a one-step process considering the entire entity O is a two-step process which analyses each business reporting unit of the entity. will be amortized over the remaining useful life of the asset occurs when asset values are adjusted to fair value in an acquisition. roblems surge onarrow_forwardDetermine correct value of goodwillarrow_forward
- Konopelski Corporation purchased McKenzie Company 3 years ago and at that time recorded goodwill of $755,000. The Division's net assets, including the goodwill, have a carrying amount of $1,754,000. The fair value of the division is estimated to be $1,001,000. PART A Account No Journal Entry Required PART B What is the carrying amount of goodwill after your assessment in Part A? $ Debit Creditarrow_forwardSimon Company determines that its goodwill is impaired.It finds that its implied goodwill is $360,000 and itsrecorded goodwill is $400,000. The fair value of its identifiableassets is $1,450,000. What is the amount of goodwillimpaired?arrow_forwardThe impairment test for goodwill is conducted based on the cash-generating unit to which the goodwill has been assigned. After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods. options : both statement false first statement true and second statement false fisrt statement false and second statement ttrue . both sttament truearrow_forward
- IXORA Company engaged your services to compute the goodwill in the purchase of another company which provided the following How much is the goodwill ?arrow_forwardLevi and Peter's Athletic Emporium (LPAE) provided the following information. Fair value of the reporting unit, including goodwill $500 Fair value of the net assets, excluding goodwill $400 Book value of net assets, excluding goodwill $600 Add: Book value of goodwill 300 Book value of the reporting unit, including goodwill $900 Note that LPAE performs the quantitative test on at least an annual basis. The qualitative assessment of goodwill reveals that it is more likely than not that the goodwill is impaired. Is there a goodwill impairment loss? Prepare any required journal entries.Requirements: Conduct the impairment test for goodwill at the end of the year.Record any impairment loss on the goodwillarrow_forwardWhich of the following would have an effect on the presentation of past years' comparable financial statements? Select one: O a. A component operation of the company is discontinued O b. Revising the estimated life of equipment Oc Correcting an error due to improper revenue recognition O d. Impairment of Goodwill Oe. Using MACRS to compute the depreciation of an asset for tax purposesarrow_forward
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