Question

Sheridans Company bought Special Products Division in Year 17 and appropriately recorded $743000 of goodwill related to the purchase. On December 31, Year 18, the fair value of Special Products Division is $5700000 and it is carried on Sheridan s books for a total of $4800000, including the goodwill. An analysis of Special Products Division s assets indicates that goodwill of $599000 exists on December 31, Year 18. What goodwill impairment should be recognized by Sheridans in Year 18

Answer 1

$0

Step-by-step explanation:

Base on the scenario been described in the question, we need to know the goodwill impairment

Goodwill is created in business accounting when an purchasing entity acquires another entity and the price is more than the fair market value of its assets.

To know the Goodwill impairment, we use the following method

Since $5,700,000 > $4,800,000

$0 impairment