Required:

a. Prepare the entry to record the purchase of Brighton Company.

b. Assume that the carrying amount of Brighton Company division's net assets, including goodwill is $2,550,000. The recoverable amount of the division is estimated to

be $ 3,000,000. Prepare the journal entry to record the impairment loss (If any) on December 31, 2020.

Moving to another question will save this response. Question 5 of 12 Question S 4.5 points On August 31, 2020, Southampton Co. acquired all of the common stock of Brighton Company, which became a division of Southampton Co. Brighton Company reported the following statement of financial position at the time of the acquisition: Brighton Company Statement of Financial Position Equity and Liabilities Assets Plant assets (ne $1,350,000 Share capital- $1.150,000 ordinary t) Inventory Receivables 235,000 Retained earnings 1,070,000 800,000 Accounts payable 587.000 Cash 422,000 Total assets $2.807.000 Total equity and t liabilities $2.807.000 An appraisal indicated that the fair value of the inventory was $372,000 and the fair value of the plant assets was $1.550,000. The agreed purchase price was $3,600,000. and this amount was paid in cash to the previous owners of Brighton Company. Required: DELL assets $2.807.000 Total equity and liabilities $2.807.000 An appraisal indicated that the fair value of the inventory was $372,000 and the fair value of the plant assets was $1,550,000. The agreed purchase price was $3,600,000, and this amount was paid in cash to the previous owners of Brighton Company. Required: a. Prepare the entry to record the purchase of Brighton Company. b. Assume that the carrying amount of Brighton Company division's net assets, including goodwill is $2,550,000. The recoverable amount of the division is estimated to be $3,000,000. Prepare the journal entry to record the impairment loss (if any) on December 31, 2020. For the toolbar, press ALT F10 (PC) or ALT-FN-F10 (Mack B IVS Paragraph V Arial Y 10pt LIXO Q F + 15- 380) xx X x 0 11 !!! 111 v DELL 12.B 0