Chapter 11, Problem 11.29E

(1)

To determine

Goodwill:

Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company.

Impairment of Goodwill:

It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s balance sheet, exceeds its fair market value.

To determine: The amount of goodwill that resulted from the Incorporation H acquisition.

(2)

To determine

The amount of goodwill impairment loss that Corporation P should recognize at the end of 2016, if any.

(3)

To determine

To prepare: The journal entry to record the impairment loss.