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On March 1, 2015, Stiller Co. purchased XYZ Co. by acquiring their net assets for a cash payment of $210,000 and a note payable of $85,000. Below is the balance sheet of XYZ Co. on the acquisition date, and the corresponding fair market values.

Fair ValueAssets Cash$80,000$80,000Accounts receivable (net of $7,000 allowance)110,000110,000Inventory75,00056,000Land45,00048,000Building (net of $17,000 accumulated depreciation)60,00045,000Equipment (net of $21,000 accumulated depreciation)75,00093,000Copyright (net of $21,000 accumulated amortization)14,00019,000Total assets$459,000$451,000Liabilities and Shareholders' Equity Accounts payable$225,000$225,000Common shares234,000 Total$459,000

Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places. (a) Record the March 1, 2015 entry for Stiller Co.

General JournalPage G3

Date. Account/Explanation. PR. Debit. Credit

(b) On December 31, 2015, Stiller Co. tests its goodwill for impairment. It is determined that the fair value of goodwill is now $23,000. Record any necessary entries on that date.

General JournalPage G2

Date. Account/Explanation. PR. Debit. Credit

(c) Assume that instead of paying a total of $295,000 for the acquisition, the only payment required by Stiller Co. was $210,000 cash. After a reassessment of all the variables, values and measurement procedures, how would Stiller Co. classify the bargain purchase (or "negative" goodwill)?

Stiller Co. would(select one).

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