Acquiror, Inc. purchased Bought, Inc. for:
Fixed assets, net
Intangible- customer lists
Present the journal entry to record the purchase by Acquiror, Inc.
Indicate the proper means of amortizing the goodwill under GAAP.
As a result of the acquisition, Acquiror obtained all of the assets and assumed all of the
liabilities of Bought, Inc.
The following represents the balance sheet of Bought, Inc., at cost
and fair value, on the date of the acquisition:
Compute any goodwill resulting from the transaction.
Estimated value of the reporting unit is
The net book value of the reporting unit is:
Goodwill on the books of the reporting unit
Ignoring goodwill, the fair market value of the reporting units net assets exceeds cost by $200,000.
If you believe there is an impairment, record that impairment in a journal entry.
How would your answer to each of the above questions differ if the estimated fair value of
the reporting unit were $5,500,000 instead of $5,000,000?
Based upon the information above, is there any impairment of goodwill?
Briefly support this
Acquiror, Inc. purchased Bought, Inc. in a prior year and they track Bought as a separate