Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 3, Problem 18P
a.
To determine
Find the amount of
b.
To determine
Identify the changes to the valuations of Company D’s tangible assets and identified intangible assets should be reported based on the goodwill impairment tests.
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Destin Company recently acquired several businesses and recognized goodwill in each acquisition. Destin has allocated the resulting goodwill to its three reporting units: Sand Dollar, Salty Dog, and Baytowne. Destin opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually.In its current year assessment of goodwill, Destin provides the following individual asset and liability values for each reporting unit:The fair values for each reporting unit (including goodwill) are $510,000 for Sand Dollar, $580,000 for Salty Dog, and $560,000 for Baytowne. To date, Destin has reported no goodwill impairments.a. How much goodwill impairment should Destin report this year?b. What changes to the valuations of Destin’s tangible assets and identified intangible assets should be reported based on the goodwill impairment tests?
Destin Company recently acquired several businesses and recognized goodwill in each acquisition. Destin has allocated the resulting goodwill to its three reporting units: Sand Dollar, Salty Dog, and Baytowne. Destin opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually.
In its current year assessment of goodwill, Destin provides the following individual asset and liability values for each reporting unit:
Carrying Amounts
Fair Values
Sand Dollar
Tangible assets
$
242,000
$
260,000
Trademark
216,000
191,600
Customer list
133,500
143,800
Goodwill
181,500
?
Liabilities
(52,500
)
(52,500
)
Salty Dog
Tangible assets
$
239,000
$
239,000
Unpatented technology
249,000
195,750
Licenses
102,500
112,900
Goodwill
199,400
?
Baytowne
Tangible assets
$
156,000
$
174,300
Unpatented technology
0
165,750…
Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually.
In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units:
Carrying Amounts
RU-1
RU-2
RU-3
Tangible assets
$180,000
$200,000
$140,000
Trademark
170,000
Customer list
90,000
Unpatented technology
170,000
Licenses
90,000
Copyrights
50,000
Goodwill
120,000
150,000
90,000
Liabilities
(30,000)
The total fair values for each reporting unit (including goodwill) are $510,000 for RU-1, $580,000 for RU-2, and $560,000 for RU-3. To date, Purchase has reported no goodwill impairments.
How much goodwill impairment should…
Chapter 3 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
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- Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 RU-2 RU-3 Tangible assets $214,000 $295,000 $207,750 Trademark 192,000 Customer list 110,250 Unpatented technology 183,000 Licenses 94,000 Copyrights 67,500 Goodwill 173,200 201,250 135,000 Liabilities (51,250) The total fair values for each reporting unit (including goodwill) are $613,000 for RU-1, $748,800 for RU-2, and $739,200 for RU-3. To date, Purchase has reported no goodwill impairments. How much goodwill impairment should…arrow_forwardPelota Company recently acquired several businesses and recognized goodwill in each acquisition. Pelota allocated the resulting goodwill to its three reporting units: R-one, R-two, and R-three. Pelota opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Pelota provides the following individual asset and liability carrying amounts for each of its reporting units: Items Tangible assets Trademark Computer software Unpatented technology Licenses Copyrights Goodwill Liabilities Carrying Amounts R-one $215,500 257,000 154,500 Goodwill impairment loss 190, 250 (35,000) R-two $261,000 R-one 232,500 100,000 187,550 The total fair values for each reporting unit (including goodwill) are $773,950 for R-one, $736,450 for R-two, and $743,500 for R-three. date, Pelota has reported no goodwill impairments. R-three $158, 250 Required: How much goodwill impairment should Pelota report this year for…arrow_forwardPelota Company recently acquired several businesses and recognized goodwill in each acquisition. Pelota allocated the resulting goodwill to its three reporting units: R-one, R-two, and R-three. Pelota opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Pelota provides the following individual asset and liability carrying amounts for each of its reporting units: Items Carrying Amounts R-one R-two R-three Tangible assets $241,000 $219,000 $159,000 Trademark 199,000 - - Computer software 148,500 - - Unpatented technology - 232,000 - Licenses - 97,500 - Copyrights - - 57,250 Goodwill 150,200 202,850 118,000 Liabilities (32,250) - - The total fair values for each reporting unit (including goodwill) are $682,350 for R-one, $709,300 for R-two, and $653,650 for R-three. To date, Pelota has reported no goodwill impairments. Required: How much goodwill impairment…arrow_forward
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