*P7.13 (LO6) (Bank Reconciliation and Adjusting Entries) The cash account of Aguilar Co. showed a ledger balance of $3.969.85 on June 30, 2020. The bank statement as of that date showed a balance of $4.150. Upon comparing the statement with the cash records, the following facts were determined 1. There were bank service charges for June of $25. 2. A bank memo stated that Bao Dai's note for $1.200 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.50 on the collection. (No entry had been made on Aguilar's books when Bao Dai's note was sent to the bank for collection.) 3. Receipts for June 30 for $3,390 were not deposited until July 2. 4. Checks outstanding on June 30 totaled $2,136.05. 5. The bank had charged the Aguilar Co.'s account for a customer's uncollectible check amounting to $253.20 on June 29. 6. A customer's check for $90 (as payment on the customer's Accounts Receivable) had been entered as 560 in the cash receipts journal by Aguilar on June 15 7. Check no. 742 in the amount of $491 had been entered in the cash journal as $419, and check no 747 in the amount of $58.20 had been entered as $582. Both checks had been issued to pay for purchases and were payments on Aguilar's Accounts Payable. Instructions a. Prepare a bank reconciliation dated June 30, 2020, proceeding to a correct cash balance. b. Prepare any entries necessary to make the books correct and complete P12.4 (LO 3, 4, 5) Groupwork (Goodwill, Impairment) On July 31, 2020, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Mexico. Conchita reported the following balance sheet at the time of the acquisition Current assets Noncurrent assets Total assets $ 800,000 2,700,000 $3,500,000 Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity $ 600,000 500.000 2.400,000 $3,500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,750,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information. Current assets Noncurrent assets (including goodwill recognized in purchase) Current liabilities Long-term liabilities Net assets $ 450,000 2,400,000 (700,000) (500,000) $1,650,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. Problems 12-37 Instructions a. Compute the amount of goodwill recognized, if any, on July 31, 2020. b. Determine the impairment loss, if any, to be recorded on December 31, 2020. c. Assume that fair value of the Conchita Division is $1,600,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded on December 31, 2020. d. Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement
