AccountingOn January 1, 20X1, Porta Corporation purchased Swick Company's net assetsand assigned goodwill of $81,500 to Reporting Division K. The following assetsand liabilities are assigned to Reporting Division K on the acquisition date:Carrying FairAmountValueCash15,500$ 15,500Inventory57,50072,500Equipment185,000205,000Goodwill81,500Accounts31,50031,500PayableRequired:On December 31, 20X3, Porta must test goodwill for impairment. Determine theamount of goodwill to be reported for Division K and the amount of goodwillimpairment to be recognized, if any, if Division K's fair value is determined to be$355,000.$295,000.$275,000.

Concept of impairment of assets Details Available Testing Good will for impairment…

On January 1, 20X1, Porta Corporation purchased Swick Company's net assets and assigned goodwill of $81,500 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date: Carrying Fair Amount Value Cash 15,500 $ 15,500 Inventory 57,500 72,500 Fguinment 185.000 205.000 %24

On January 1, 20X1, Porta Corporation purchased Swick Company's net assets and assigned goodwill of $81,500 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date: Carrying Fair Amount Value Cash 15,500 $ 15,500 Inventory 57,500 72,500 Fguinment 185.000 205.000 %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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