ch Palisades specializes in media distribution and viewed its acquisition of Sherwood as a strategic move into content ownership and creation. Palisades expected both cost and revenue synergies from controlling Sherwood's artistic content (a large library of classic movies) and its sports programming specialty video operation. Accordingly, Palisades allocated all of Sherwood's assets and liabilities including al $49,655,000 of goodwill recognized in the acquisition to a newly formed operating segment appropriately designated as a reporting unit However, Sherwood's assets have taken longer than anticipated to produce the expected synergies with Palisades's operations. Accordingly, Palisades reviewed events and circumstances and concluded that Sherwood's fair value was likely less than its carrying amount. At year-end, Palisades assessed the Sherwood reporting unit's fair value to $110,460,000, At December 31, Palisades and Sherwood submitted the following balances for consolidation. There were no intra-entity payables on that date. Also, Palisades had not yet recorded any goodwill impairment. Palisades, Inc. Sherwood Co. Revenues $ (18,570,000) $(12,468,000) Operating expenses 10,350,000 12,250,000 Equity in Sherwood's earnings (145,400) Dividends declared 415,000 125,000 Retained earnings, 1/1 (52,690,000) (2,529,000) Cash 474,000 132,600 Receivables (net) 256,000 920,000 Investment in Sherwood 120, 479,400 Broadcast licenses 465,000 14.060,000 Movie Library 480,000 45, 460,000 Equipment (net) 131,230,000 17,730,000 Current Liabilities 1268,000) 765, 000) Long-term debt (22,30,000 (7.480,000 Common stock (170,230,000) (67,730,000) a. What is the relevant test to determine whether goodwill is Impaired? b. How did Palisades determine Sherwood's December 31 carrying amount of $120,479,400? c. At what amount should Palisades record an impairment loss for its Sherwood reporting unit for the year? d. What is consolidated net income for the year? e. What is the December 31 consolidated balance for goodwill? f. Prepare a consolidated worksheet for Palisades and Sherwood (Palisades's trial balance should tlest be adjusted for any appropriate impairment loss) ch Palisades specializes in media distribution and viewed its acquisition of Sherwood as a strategic move into content ownership and creation. Palisades expected both cost and revenue synergies from controlling Sherwood's artistic content (a large library of classic movies) and its sports programming specialty video operation. Accordingly, Palisades allocated all of Sherwood's assets and liabilities including al $49,655,000 of goodwill recognized in the acquisition to a newly formed operating segment appropriately designated as a reporting unit However, Sherwood's assets have taken longer than anticipated to produce the expected synergies with Palisades's operations. Accordingly, Palisades reviewed events and circumstances and concluded that Sherwood's fair value was likely less than its carrying amount. At year-end, Palisades assessed the Sherwood reporting unit's fair value to $110,460,000, At December 31, Palisades and Sherwood submitted the following balances for consolidation. There were no intra-entity payables on that date. Also, Palisades had not yet recorded any goodwill impairment. Palisades, Inc. Sherwood Co. Revenues $ (18,570,000) $(12,468,000) Operating expenses 10,350,000 12,250,000 Equity in Sherwood's earnings (145,400) Dividends declared 415,000 125,000 Retained earnings, 1/1 (52,690,000) (2,529,000) Cash 474,000 132,600 Receivables (net) 256,000 920,000 Investment in Sherwood 120, 479,400 Broadcast licenses 465,000 14.060,000 Movie Library 480,000 45, 460,000 Equipment (net) 131,230,000 17,730,000 Current Liabilities 1268,000) 765, 000) Long-term debt (22,30,000 (7.480,000 Common stock (170,230,000) (67,730,000) a. What is the relevant test to determine whether goodwill is Impaired? b. How did Palisades determine Sherwood's December 31 carrying amount of $120,479,400? c. At what amount should Palisades record an impairment loss for its Sherwood reporting unit for the year? d. What is consolidated net income for the year? e. What is the December 31 consolidated balance for goodwill? f. Prepare a consolidated worksheet for Palisades and Sherwood (Palisades's trial balance should tlest be adjusted for any appropriate impairment loss)