Company fair value book value Carrying value of goodwill return on assets

Sprint Nextel $36,361 $51,271 $30,718 3.5%

Washington Mutual 11,742 23,941 9,062 2.4%

E* Trade Financial 1,639 4,104 2,035 5.6%

a) Estimate the amount of goodwill impairment for each company and prepare the journal entry to record the impairment. For each company, you may assume that the book value less the carrying value of the goodwill approximates the fair value of the companies' net assets.

b) Discuss the effects of your entries in part (a) on your evaluation of these companies based on the return on assets ratio.