Goodwill (V1) In late July 2020, Bramble Ltd., a private company, paid $1.9 million to acquire all of the net assets of Sheffield Corp., which then becarne a division of Bramble. Sheffield reported the following statement of financial position at the time of acquisition: 3 $415,000 $300,000 Current assets Current liabilities 5 Non-current assets 1,335,000 Long-term liabilities Shareholders' equity 265,000 1.185,000 $1,750,000 $1,750,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Sheffield was $1.6 million. Over the next six months of operations, the new division had operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, the fair value of the Sheffield Division is $1,850,000, and the division reports the following statement of financial position information: $464,000 2,400,000 Current assets Non-current assets (including goodwill recognized in purchase) Current liabilities Long-term liabilities Net assets -703,000 -526.000 $1.635.000 Assume that Bramble Ltd. prepares financial statements in accordance with ASPE. 19 Instructions 20 a) Calculate the amount of goodwill, if any, that should be recognized in late July 2020. (2 marks) b) Assume that the fair value of the Sheffield Division on December 31, 2020, is $1.3 million. Determine the loss on impairment, if any, that 21 would be recognized. (2 marks) 22 C) Prepare the journal entry to record the loss on impairment, if any. (2 marks) 23 Please use the space below to show support for your calculations. 24 25 26 27 28 09 30 31 2 13 5 6 7 8 9 Credit 43 Please provide your complete journal entry (omit explanations) in the table below. 44 Date Accounts Debit 45 46 47 48 49 50 51 52