Homework Help is Here – Start Your Trial Now!
Business
Accounting
Soo,000 Non-current liabilities 500,00 600.00 500,000 Current lhabilities Total equity and iabilities S3.500,0c alue of the identifiable net assets of Conchita was erating losses. In addition, it nowappears that it v the following statement of financial position info $ 450.0

Soo,000 Non-current liabilities 500,00 600.00 500,000 Current lhabilities Total equity and iabilities S3.500,0c alue of the identifiable net assets of Conchita was erating losses. In addition, it nowappears that it v the following statement of financial position info $ 450.0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Question 2 Piz.5 L03.) (Goodwill, Impairment) On July 31, 2022. Mexico Company paid Se o00.o00 to acquire all of the ordinary shares of Condhita Incorporated, which became a division (cash-generating unit of Mexico. Conchita reported the following statement of financial position at the time of the acquisition $2.400,000 Non-current assets S2,700,000 Equity Current assets Total assets Soo,000 Non-curent liabihties $3.500,000 Current liabilities 500,000 600.000 Total equity and liabilities S3.500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was S2-750,000.Over the next6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December g1, 2022, Conchita reports the following statement of financial position information S 450,000 Current assets Non-eurrent assets (including goodwill recognized ia purchase) 2400,000 Current liabilities Non-current liabilities Goo.000) (500,000) $1650.000 Net assets It is determined that the recoverable amount of the Conchita Dvision is Sa S30.000. Instructions a. Compute the amount of goodwill recognized, if any, on July 3a 2002 b. Determine the impairment loss, if any, to be recorded on December g.2022. CAssume that the recoverable amount of the Conchita Division is Sa.6o0.copinstead of S1850.000. Determine the inpairmentloss itany to be recorded on December 31, 2o22. d Prepare the journal entry to record the impairment loss. if any, and indicate where the loss soa be reported in the income statement.
Transcribed Image Text:Question 2 Piz.5 L03.) (Goodwill, Impairment) On July 31, 2022. Mexico Company paid Se o00.o00 to acquire all of the ordinary shares of Condhita Incorporated, which became a division (cash-generating unit of Mexico. Conchita reported the following statement of financial position at the time of the acquisition $2.400,000 Non-current assets S2,700,000 Equity Current assets Total assets Soo,000 Non-curent liabihties $3.500,000 Current liabilities 500,000 600.000 Total equity and liabilities S3.500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was S2-750,000.Over the next6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December g1, 2022, Conchita reports the following statement of financial position information S 450,000 Current assets Non-eurrent assets (including goodwill recognized ia purchase) 2400,000 Current liabilities Non-current liabilities Goo.000) (500,000) $1650.000 Net assets It is determined that the recoverable amount of the Conchita Dvision is Sa S30.000. Instructions a. Compute the amount of goodwill recognized, if any, on July 3a 2002 b. Determine the impairment loss, if any, to be recorded on December g.2022. CAssume that the recoverable amount of the Conchita Division is Sa.6o0.copinstead of S1850.000. Determine the inpairmentloss itany to be recorded on December 31, 2o22. d Prepare the journal entry to record the impairment loss. if any, and indicate where the loss soa be reported in the income statement.
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Horizontal Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS