Change in the Estimated Life of Goodwill Zalin Corporation purchased Amgren Company on January 1, 1998, and
Question:
Change in the Estimated Life of Goodwill Zalin Corporation purchased Amgren Company on January 1, 1998, and recorded goodwill of $5,600,000, which is amortized on a 10-year basis using straight-line write-off. On January 1, 2001, Zalin concluded the goodwill had a remaining life of 4 years.
a. What amount of unamortized goodwill should Zalin Corporation have reported at December 31, 2000?
b. What amount of amortization expense should Zalin record in 2001 and in each of the subsequent 3 years?
c. What amount of amortization expense would Zalin have recorded in each of the first 3 years if it had initially estimated the life of the goodwill to be 7 years?
Step by Step Answer:
Financial Accounting A Decision Making Approach
ISBN: 9780471328230
2nd Edition
Authors: Thomas E. King, Valdean C. Lembke, John H. Smith