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On January 1, 20X1, Porta Corporation purchased Swick Companys net assets and assigned goodwill of $80,000 to Reporting Division K. The following assets and liabilities
On January 1, 20X1, Porta Corporation purchased Swick Companys net assets and assigned goodwill of $80,000 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date:
Carrying Amount | Fair Value | |||||
Cash | $ | 14,000 | $ | 14,000 | ||
Inventory | 56,000 | 71,000 | ||||
Equipment | 170,000 | 190,000 | ||||
Goodwill | 80,000 | |||||
Accounts Payable | 30,000 | 30,000 | ||||
Required: On December 31, 20X3, Porta must test goodwill for impairment. Determine the amount of goodwill to be reported for Division K and the amount of goodwill impairment to be recognized, if any, if Division Ks fair value is determined to be
- $340,000.
- $280,000.
- $260,000.
Amount of Goodwill Goodwill Impairment
a.
b.
c.
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