Question

Following its acquisition of the net assets of Dan Company, Empire Company assigned goodwill of $60,000 to one of the reporting divisions. Information for this division follows:

	Carrying Amount				Fair Value
Cash	$	20,000			$	20,000
Inventory		35,000				40,000
Equipment		125,000				160,000
Goodwill		60,000
Accounts Payable		30,000				30,000

31) Based on the preceding information, what amount of goodwill will be reported for this division – after any necessary impairments – if the fair value of the entire reporting unit is determined to be $200,000?

A) $0

B) $60,000

C) $30,000

D) $50,000

32) Based on the preceding information, what amount of goodwill impairment will be recognized for this division if its fair value is determined to be $195,000?

A) $15,000

B) $30,000

C) $60,000

D) $55,000

33) Based on the preceding information, what amount of amount of goodwill impairment will be recognized for this division if its fair value is determined to be $245,000?

A) $0

B) $5,000

C) $60,000

D) $55,000