Question
After the adoption of FASB ASU 2017-04, if the fair value of a reporting unit with goodwill falls below its book value, which of the
After the adoption of FASB ASU 2017-04, if the fair value of a reporting unit with goodwill falls below its book value, which of the following statements is true?
Select one: A. There is a potential impairment loss for the amount that the book value of the goodwill exceeds its implied fair value.
B. Goodwill is removed from the consolidated balance sheet. C. No additional impairment testing is required. D. A goodwill impairment loss is recognized for the excess of book value over fair value of the reporting unit.
Midlothian acquires 100 percent of the outstanding voting shares of Cedar Company on January 1, 2020. To obtain these shares, Midlothian pays $400,000 cash and issues 20,000 shares of $1 par value common stock on this date. Midlothians stock had a fair value of $10 per share. Midlothian also pays an additional $3,000 in stock issuance costs. At date of acquisition, the book values and fair values of Cedar's net assets amounted to $450,000 and $520,000, respectively. How much additional paid-in capital was recorded as a result of the combination?
Select one: A. $197,000 B. $200,000 C. $177,000 D. $180,000
When a noncontrolling Equity Method Investment balance is reduced to zero as investee incurs losses Select one: A. additional investment losses will result in a credit balance in Equity Investment. B. the investment remains at zero until profits have eliminated the unrealized loss. C. the investment remains at zero until the investment is sold. D. the investor must change to the fair value method.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started