During Year 1, Evergreen Corporation had been negotiating to purchase all of Pine Companys noncash assets and to assume all of its liabilities for a single cash price. The target closing date is January 1 of Year 2. Evergreen requested, and was provided, considerable data, including the following midyear balance sheet (summarized). Evergreen also independently estimated fair values of the assets and liabilities for each category provided on the balance sheet of Pine Co.

		Fair Value
	Book Value	Developed by
Balance Sheet, June 30, Year 1	from Pine Co.	Evergreen Corp.
Assets
Cash	$19,000	$ 0**
Accounts receivable*	60,000	58,000
Inventory	140,000	90,000
Property, plant, and equipment*	300,000	285,000
Land	11,000	40,000
Franchise (unamortized balance)	20,000	21,000
Total	$550,000	$494,000
Liabilities
Current liabilities	$40,000	$37,000
Bonds payable	200,000	200,000
Equity
Stockholders equity	310,000
Total	$550,000

* Net of the allowance for doubtful accounts and accumulated depreciation, respectively. **Cash will not be purchased by Evergreen Corporation.

Required

a. Compute the amount of goodwill recorded by Evergreen Corporation for this purchase assuming that Pine Company is created as a new segment of Evergreen, that all goodwill is assigned to that segment, and the purchase price is $267,000. Goodwill: $Answer

b. Provide the entry for Evergreen Corporation to record the purchase of Pine Company.

	Account Name	Dr.	Cr.
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	To record purchase of Pine Company

c. Provide the entry (if any) at the end of Year 2 to adjust goodwill for impairment assuming the following information. Note: If a journal entry isn't required on any of the dates shown, select "N/Adebit" and "N/Acredit" as the account names and leave the Dr. and Cr. answers blank (zero).

Carrying value of the segment	$250,000
Fair value of the segment	230,000

Date	Account Name	Dr.	Cr.
Year 2	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	CashAccounts ReceivableBonds PayableCurrent LiabilitiesFranchiseGoodwillImpairment LossInventoryLandPatentProperty, Plant, and EquipmentStockholders equity TrademarkN/ADebitN/ACredit		Answer
	To record year-end adjustment