Three months after the acquisition, PR receives information revealing that the identifiable intangible assets reported on SX's

Question:

Three months after the acquisition, PR receives information revealing that the identifiable reported on SX's books at the date of acquisition were really worth $12,000 instead of $14,000. How does PR report this information?
a. Loss of $2,000, reported on the income statement
b. $2,000 decrease in goodwill
c. $2,000 increase in goodwill
d. Not reported
Use the following information to answer questions l - 7 below. All amounts are in thousands.
PR Company pays $10,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all of SX Corporation's net assets. SX's at the date of acquisition is as follows:

PR's consultants find these items that are not reported on SX's balance sheet:

Fair value

Potential contracts with new customers........................................................... $8,000

Advanced production technology.................................................................... 4,000

Future cost savings........................................................................................... 2,000

Customer lists................................................................................................... 1,000

Outside consultants are paid $200 in cash, and registration fees to issue PR's new stock are $400. All questions below relate to the entry or entries PR makes to record the acquisition on its books.

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