VeriSign, Inc. offers a variety of Internet and communications-related services to its customers. In
a recent income statement, the company reported a $182 goodwill impairment loss. The impairment
charge related to the goodwill of its Content, and Co
Synthetic Fuels Corporation prepares its financial statements according to IFRS. On June 30, 2011, the
company purchased equipment for $350,000. The equipment is expected to have a seven-year useful
life with no residual value. Synthetic uses the str
On March 30, 2011, Calvin Exploration purchased a drilling machine for $840,000. The estimated
useful life of the machine is 10 years and no residual value is anticipated. An important component of
the machine is the drill housing component that will
Atlas Trucking incurred the following costs during 2011:
1. Spent $15,000 on a major overhaul for a tractor-trailer rig. The overhaul is expected to increase the
service life of the rig by three years.
2. Repaired the air conditioning system for $3,0
Eckland Manufacturing Co. purchased equipment on January 1, 2009, at a cost of $90,000. Depreciation
for 2009 and 2010 was based on an estimated eight-year life and $2,000 estimated residual value. In
2011, Eckland revised its estimate and now believ
Gonzaga Company has used the double-declining-balance method for depreciation since it started
business in 2007. At the beginning of 2011, the company decided to change to the straight-line method.
Depreciation as reported and what it would have been
Required: Determine the amount, if any, of the impairment loss that El Dorado must recognize on these
An impairment loss must be recognized because the undiscounted sum of future cash flows from the
assets are less than the book value. The lo
Assume the same facts as above, except that the fair value of Oxford (the reporting unit) is $225 million.
Required: Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize
on these assets.
An impairment loss must be
On September 30, 2011, Morgan, Inc. acquired all of the outstanding common stock of Pathways, Inc.
for $100 million. In addition to tangible assets, Morgan recorded the following assets as a result of the
Morgan's policy is to amortize i
Zvinakis Mining Company paid $200,000 for the rights to mine lead in Southeast Missouri. The cost to
drill and erect a mine shaft was $2,400,000 and equipment to process the lead ore before shipment to
the smelter was $1,800,000. The mine is expected
In its 2007 annual report to shareholders, Martin Marietta Materials, Inc. included the following in its
financial statement footnotes:
NOTE F: PROPERTY, PLANT AND EQUIPMENT, NET
In another disclosure note, the company reported:
Kingston Corporation has $95 million of goodwill on its books from the 2009 acquisition of Reliant
Motors. At the end of its 2011 fiscal year, management has provided the following information for its
annual goodwill impairment test ($ in millions):
A major expenditure increased a truck's life beyond the original estimate of life. GAAP permits the
expenditure to be debited to:
None of the above.
AACSB: Reflective thinking