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Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $ 400,000. The Johnson Divisions net assets, including the goodwill,
Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $ 400,000. The Johnson Divisions net assets, including the goodwill, have a carrying amount of $1,600,000. All identifiable assets have fair value equal to their carrying value except for land which is reported at $100,000 below its fair value. The fair value of the entire division is estimated to be $ 1,600,000.
Prepare Waters journal entry, if necessary, to record impairment of the goodwill.
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