On January 1, 20X1, Porta Corporation purchased Swick Company’snet assets and assigned goodwill of $80,900 to Reporting DivisionK. The following assets and liabilities are assigned to ReportingDivision K on the acquisition date:
| Carrying Amount | Fair Value |
| Cash | $ | 14,900 | | $ | 14,900 | |
| Inventory | | 56,900 | | | 71,900 | |
| Equipment | | 179,000 | | | 199,000 | |
| Goodwill | | 80,900 | | | | |
| Accounts Payable | | 30,900 | | | 30,900 | |
|
Required:
On December 31, 20X3, Porta must test goodwill for impairment.Determine the amount of goodwill to be reported for Division K andthe amount of goodwill impairment to be recognized, if any, ifDivision K’s fair value is determined to be
- $349,000.
- $289,000.
- $269,000.
|
| | Amount of Goodwill | Goodwill Impairment | | a. | | | | b. | | | | c. | | |
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