Question

Twilight Corporation acquired End-of-the-World Products on January 1, 2020 for $6,200,000, and recorded goodwill of $1,000,000 as a result of that purchase. At December 31, 2021, the End-of-the-World Products Division had a fair value of $5,440,000. The net identifiable assets of the Division (including goodwill) had a carrying value of $5,740,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2021

Answer 1

Loss on impairment of goodwill that should be recorded is $300,000

Step-by-step explanation:

Carrying value of net identifiable assets $5,740,000

Less: Fair value $5,440,000

Loss on impairment of goodwill $300,000