The following data pertains to questions
Parent and Sub Inc had the following balance sheets on December 31,2008: On January 1,2009 Parent purchased all of Sub Inc's Common Shares for $40,000 in cash.On that date,Sub's Current Assets and Fixed Assets were worth $26,000 and $54,000,respectively.Assuming that Consolidated Financial Statements were prepared on that date,answer the following:
-How much Goodwill was amortized during 2003?
A)$700
B)($1,700)
C)$1,700
D)None - Goodwill is never amortized.

Question

The following data pertains to questions 
Parent and Sub Inc had the following balance sheets on December 31,2008:  On January 1,2009 Parent purchased all of Sub Inc's Common Shares for $40,000 in cash.On that date,Sub's Current Assets and Fixed Assets were worth $26,000 and $54,000,respectively.Assuming that Consolidated Financial Statements were prepared on that date,answer the following:
-How much Goodwill was amortized during 2003?
A)$700 
B)($1,700) 
C)$1,700 
D)None - Goodwill is never amortized.

Quizplus · Accepted Answer

Goodwill is never amortized. It is subject to an annual impairment test instead. Therefore, no goodwill was amortized during 2003.

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