Question
On May 31, 2021, Armstrong Company paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall
On May 31, 2021, Armstrong Company paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet at the time of the acquisition:
Current Assets: $900,000
Current Liabilities: 600,000
Noncurrent Assets 2,700,000
LT Liabilities 500,000
Stockholders Equity 2,500,000
total Assets 3,600,000
total liabilities and stockholders equity 3,600,000
It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $3,100,000. At December 31, 2021, Hall reports the following balance sheet information:
Current assets: $ 800.000
Noncurrent assets (including goodwill recognized in purchase): 2,400,000
Current liabilities: (700.000)
Long-term liabilities: (500.000)
Net assets: $2,000,000
It is determined that the fair value of the Hall division is $2,200,000.
Determine the impairment loss related to Goodwill, if any, to be recorded on December 31, 2021.
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