• Apple Inc. acquired a major competitor during the fiscal year for $2 billion, resulting in $1 billion in goodwill recognized on the balance sheet. The company reported the following financial figures:
  • Goodwill before Impairment: $5 billion
  • Total Assets: $200 billion
  • Net Income: $50 billion
  • Earnings per Share (EPS): $10

• Requirements:
  1. Calculate Apple's goodwill impairment loss if the fair value of the acquired entity is $1.5 billion.
  2. Prepare a balance sheet reflecting the impairment loss and adjusted goodwill balance.
  3. Analyze the impact of goodwill impairment on Apple's financial ratios, including debt-to-equity ratio and return on equity (ROE).
  4. Discuss the qualitative factors Apple considers in goodwill impairment testing.
  5. Evaluate the disclosure requirements for goodwill impairment in Apple's financial statements.