Homework Answers
32) The implied fair value of goodwill = Fair value of reporting unit - Fair value of net assets of the reporting unit, excluding goodwill, assuming a hypothetical purchase of the reporting unit. = 1,800 - 1,300
= $500
The answer is False.
33) For goodwill impairment, both the tests have to be passed.
The answer is False.
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Company B has a reporting unit that failed step one. For step 2, it has calculated...
In 20x1, Company A has two reporting units and having concluded it is unable to use...
In 20x1, Company A has two reporting units and having concluded it is unable to use the qualitative test it measures for impairment of goodwill on December 31. Relevant amounts (in Millions) at 12/31/x1 are as follows: Reporting unit хү Book Value Goodwill $40 $30 Other assets, net of liabilities 160 60 Net book value 200 Fair value of reporting unit 175 30. The Reporting unit X passes step 1 True False 31. The Reporting unit Y passes step 1...
What two things are compared In Step 1 of the goodwill Impairment test? The fair value...
What two things are compared In Step 1 of the goodwill Impairment test? The fair value of the reporting unit to the book value of the reporting unit including goodwill B. The implied fair value of the goodwill to the book value of the goodwill C. The fair value of total intangible assets to the book value of total intangible assets D. The fair value of total assets to the fair value of total liabilities 4. In Step 1, goodwill...
Parent Company recently acquired a business appropriately recognizing goodwill in the acquisition at the reporting unit...
Parent Company recently acquired a business appropriately recognizing goodwill in the acquisition at the reporting unit level. The goodwill was allocated to the reporting units: Rexy Inc. Parent provides the following information in performing the 2019 annual review for impairment: Rexy Reporting Unit: Carrying value of net assets including $130,000 of Goodwill equals $540,000; Fair Value of net assets excluding Goodwill equals $400,000; Valuation of Reporting Unit (including Goodwill $525,000). Using the two-step Goodwill Impairment test, compute the amount of...
29) The fair value of net identifiable assets of a reporting unit of X Company is...
29) The fair value of net identifiable assets of a reporting unit of X Company is $300,000. On X Company's books, the carrying value of this reporting unit's net assets is $350,000, which includes $60,000 of goodwill. If the fair value of the reporting unit as a whole is $335,000, what amount of goodwill impairment will be recognized for this unit? A) $0 B) $15,000 C) $25,000 D) $35,000 Answer: B Difficulty: 3 Hard Topic: Goodwill Impairment Learning Objective: 01-05...
Problem 4 Kentfield Corporation has $260 million of goodwill on its book from the 2015 acquisition...
Problem 4 Kentfield Corporation has $260 million of goodwill on its book from the 2015 acquisition of Seaford Shipping. At the end of its 2018 fiscal year, management has provided the following information for a required goodwill impairment test ($ in millions): Fair value of Seaford (approximates fair value less costs to sell) Fair value of Seaford's net assets (excluding goodwill) Book value of Seaford's net assets (including goodwill) Present value of estimated future cash flows $ 810 650 850...
Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for...
Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for possible goodwill impairment. Sellers has recognized net assets of $1,132, including goodwill of $685. Seller’s fair value is assessed at $1,095 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $183 and $147, respectively). The following table summarizes current financial information for...
Need help for parts a & b for the problems Goodwill Allocation and Impairment Testing Porter...
Need help for parts a & b for the problems
Goodwill Allocation and Impairment Testing Porter Corporation acquired Stewart CEDERE vices, and Mobile Broadband. In addition, one of Porter's reporting units, U.S. Cellular, benefit on January 1, 2020, at a cost of $180 million. Stewart has three reporting units, Networks, Globe the acquisition. Relevant data are as follows, at the date of acquisition (in millions): 176 Chapter 4 Consolidated Financial Statements Subsequent to Acquisite LO 3 P4.6 Global Services Mobile...
In 20X1, Cordova Inc. acquired Cordant Corporation and $140 million in goodwill was recorded. At the...
In 20X1, Cordova Inc. acquired Cordant Corporation and $140 million in goodwill was recorded. At the end of its 20X3 fiscal year, management has provided the following information for a required goodwill impairment test ($ in millions): Fair value of Cordant (approximates fair value less costs to sell) $ 980 Fair value of Cordant’s net assets (excluding goodwill) 900 Book value of Cordant’s net assets (including goodwill) 1,050 Present value of estimated future cash flows 1,000 Assuming that Cordant is...
Exercise 11-33 (Static) Goodwill valuation and impairment; Chapters 10 and 11 [LO11-8] On May 28, 2021,...
Exercise 11-33 (Static) Goodwill valuation and impairment; Chapters 10 and 11 [LO11-8] On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $420 million. The fair value of Harman's identifiable tangible and intangible assets totaled $512 million, and the fair value of liabilities assumed by Pesky was $150 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair...
Problem 3 Sanders Corporation operates a factory in Arizona. Due to a change in business climate,...
Problem 3 Sanders Corporation operates a factory in Arizona. Due to a change in business climate, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: $243,000,000 Cost Accumulated depreciation Estimate of the total cash flows to be generated by selling the products manufactured at the Arizona factory, not discounted to present value 122,000,000 110,000,000 94,000,000 90,000,000 Present value of estimated future cash flows Estimated fair value of the Arizona factory determined...
In 20x1, Company A has two reporting units and having concluded it is unable to use the qualitative test it measures for impairment of goodwill on December 31. Relevant amounts (in Millions) at 12/31/x1 are as follows: Reporting unit хү Book Value Goodwill $40 $30 Other assets, net of liabilities 160 60 Net book value 200 Fair value of reporting unit 175 30. The Reporting unit X passes step 1 True False 31. The Reporting unit Y passes step 1...
Problem 4 Kentfield Corporation has $260 million of goodwill on its book from the 2015 acquisition of Seaford Shipping. At the end of its 2018 fiscal year, management has provided the following information for a required goodwill impairment test ($ in millions): Fair value of Seaford (approximates fair value less costs to sell) Fair value of Seaford's net assets (excluding goodwill) Book value of Seaford's net assets (including goodwill) Present value of estimated future cash flows $ 810 650 850...
Need help for parts a & b for the problems
Goodwill Allocation and Impairment Testing Porter Corporation acquired Stewart CEDERE vices, and Mobile Broadband. In addition, one of Porter's reporting units, U.S. Cellular, benefit on January 1, 2020, at a cost of $180 million. Stewart has three reporting units, Networks, Globe the acquisition. Relevant data are as follows, at the date of acquisition (in millions): 176 Chapter 4 Consolidated Financial Statements Subsequent to Acquisite LO 3 P4.6 Global Services Mobile...
Exercise 11-33 (Static) Goodwill valuation and impairment; Chapters 10 and 11 [LO11-8] On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $420 million. The fair value of Harman's identifiable tangible and intangible assets totaled $512 million, and the fair value of liabilities assumed by Pesky was $150 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair...
Problem 3 Sanders Corporation operates a factory in Arizona. Due to a change in business climate, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: $243,000,000 Cost Accumulated depreciation Estimate of the total cash flows to be generated by selling the products manufactured at the Arizona factory, not discounted to present value 122,000,000 110,000,000 94,000,000 90,000,000 Present value of estimated future cash flows Estimated fair value of the Arizona factory determined...
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