On May 31, 2013, Armstrong Company paid $3,300,000 to acquire all the common stock of Hall Corp , which became a division of Armstrong Hall reported the following balance sheet at the time of the acquisition It was determined at the date of the purchase that the fair value of the identifiable net a...

a Calculating Goodwill Fair Value of consideration 33000 ...

On May 31, 2013, Armstrong Company paid $3,300,000 to acquire all the common stock of Hall Corp.,

Question:

On May 31, 2013, Armstrong Company paid $3,300,000 to acquire all the of Hall Corp., which became a division of Armstrong. Hall reported the following at the time of the acquisition:

It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $2,800,000. At December 31, 2013, Hall reports the following balance sheet information
Current assets ........................ 800,000
Non current assets (including goodwill recognized in purchase) ..... 2,400,000
Current Liabilities ...................... (700,000)
Long term liabilities ...................... (500,000)
Net assets ....................... $2,000,000
It is determined that the fair value of the Hall division is $2,100,000. The recorded amount of Hall€™s net assets (excluding goodwill) is same as fair value, except for property, plant, and equipment, which has a fair value of $200,000 above the carrying value.
Instructions:
a) Compute the amount of goodwill recognized, if any, on May 31, 2013
b) Determine the impairment loss, if any, to be recorded on December 31, 2013
c) Assume that the fair value of the Hall division is $1,950,000 instead of $2,100,000. Prepare the journal entry to record the impairment loss, if any, on December 31,2013.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...