a.
Concept Introduction:
Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary
the amount, if any, that P should report as a
a.
Answer to Problem 1.33P
Goodwill to be impaired is
Explanation of Solution
For A:
Thus, the value of goodwill impairment is
For B:
Thus, the value of goodwill impairment is
For C:
Thus, the value of goodwill impairment is
b.
Concept Introduction:
Consolidation: Consolidation is the process of accounting where books of the parent company are reported along with the books of the subsidiary company in consolidated/combined form after making necessary adjustment entries as required in the process of consolidation.
the amount of goodwill that P should report in its current financial statements.
b.
Explanation of Solution
| Goodwill to be reported | ||||
| Reporting unit | ||||
| A | B | C | ||
| Carrying value of goodwill | | | | |
| Implied goodwill at year-end | | | | |
| Goodwill to be reported at year-end | | | | |
Total Goodwill at year-end:
Reporting Unit A:
Reporting Unit B:
Reporting Unit C:
Total Amount of Goodwill:
Computation of Goodwill:
| Reporting Unit A | ||
| Fair value of reporting unit | ||
| Fair value of identifiable assets | ||
| Fair value of accounts payable | ||
| Fair value of net assets | ||
| Implied goodwill at year end |
| Reporting Unit B | ||
| Fair value of reporting unit | ||
| Fair value of identifiable assets | ||
| Fair value of accounts payable | ||
| Fair value of net assets | ||
| Implied goodwill at year end |
| Reporting Unit C | ||
| Fair value of reporting unit | ||
| Fair value of identifiable assets | ||
| Fair value of accounts payable | ||
| Fair value of net assets | ||
| Implied goodwill at year end |
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Chapter 1 Solutions
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