Purchase Solution

goodwill arising from a recent business combination

Not what you're looking for?

Ask Custom Question

* Reporting Unit C is assigned $200,000 of goodwill arising from a recent business combination. The current carrying value of its net assets is $400,000 and the current fair value of its net assets, excluding goodwill, is $350,000. The fair value of the reporting unit is estimated to be $380,000. The amount of the impairment loss is:
a. $150,000
b. $170,000
c. $180,000
d. $200,000
e. None of the above

The next two questions refer to the following:
Assume that P Company purchases 10 percent of S Company's common stock for $50,000 at the beginning of the year. During the year, S has net income of $25,000 and pays dividends of $10,000.

* The entry recorded by P for the purchase of S' common stock includes which of the following:
a. A debit to Cash for $50,000
b. credit to Investment in S Company Common Stock for $50,000
c. credit to Cash for $50,000
d. debit to Cash for $10,000
e. None of the above

* The entry recorded by P for the receipt of dividend income from S Company includes which of the following:
a. A credit to Cash for $1,000
b. A debit to Cash for $10,000
c. A debit to Dividend Income for $1,000
d. debit to Cash for $1,000
f. None of the above

Attachments
Purchase this Solution

Solution Summary

The solution explains some multiple choice questions in accounting

Solution Preview

Please see the attached file.

* Reporting Unit C is assigned $200,000 of goodwill arising from a recent business combination. The current carrying value of its net assets is $400,000 and the current fair value of its net assets, excluding goodwill, is $350,000. The fair value of the reporting unit is estimated to be $380,000. The amount of the impairment loss is:
a. $150,000
b. $170,000
c. $180,000
d. $200,000
e. None of the above

Since the estimated fair value of the reporting unit is less than the current carrying value of ...

Purchase this Solution


Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.