Brief Exercise 12-8

Flounder Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $350,000. The Johnson Divisions net assets, including the goodwill, have a carrying amount of $780,000. The fair value of the division is estimated to be $728,000 and the implied goodwill is $298,000. Prepare Flounder journal entry to record impairment of the goodwill.