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Bridgeport Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $310,000....

Bridgeport Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $310,000. The Johnson Division’s net assets, including the goodwill, have a carrying amount of $620,000. The fair value of the division is estimated to be $830,000. Prepare Bridgeport journal entry to record impairment of the goodwill.

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Answer #1

Answer:

Good will = $310,000

Carrying value = $620,000

Fair value or Market value = $830,000

Here, market value is greater than carrying value.

If fair value or market value is greater than carrying value, then there is no need of impairment of goodwill. Thus no jounal entry is required.

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