Week2 HW - Exercise 2-8 Current Assets Long-term Assets...

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Exercise 2- 8 Current Assets 362,000 Long-term Assets ($1,890,000 + $20,000) + ($98,000 + $5,000) 2,013,00 0 Goodwill * 395,000 Liabilities 119,000 Long-term Debt 491,000 Common Stock (144,000 × $5) 720,000 Other Contributed Capital (144,000 × ( $15 - $5)) 1,440,000 * (144,000 × $15) – [$362,000 + $2,013,000 – ($119,000 + $491,000)] = $395,000 Total shares issued + 5 000 20 5 000 700 $ , $ $ , $ = 144,000 Fair value of stock issued (144,000 × $15) = $2,160,000 Exercise 2-1 0 Part A. 2011: Step 1 : Fair value of the reporting unit $400,000 Carrying value of unit : Carrying value of identifiable net assets $330,000 Carrying value of goodwill ($450,000 - $375,000) 75,000 405,000 Excess of carrying value over fair value $ 5,000 The excess of carrying value over fair value means that step 2 is required. Step 2: Fair value of the reporting unit $400,000 Fair value of identifiable net assets 340,000 Implied value of goodwill 60,000 Recorded value of goodwill ($450,000 - $375,000) 75,000 Impairment loss $ 15,000 2012: Step 1 : Fair value of the reporting unit $400,000 Carrying value of unit : Carrying value of identifiable net assets $320,000
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Week2 HW - Exercise 2-8 Current Assets Long-term Assets...

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