Prossart Company owned 70% of the outstanding stock of Say Company. During the annual goodwill impairment test, the following information pertaining to Say was noted: The amount of goodwill impairment loss that would be recorded on Prossart's books would be:
A)$200,000
B)$140,000
C)$100,000
D)$70,000

Question

Prossart Company owned 70% of the outstanding stock of Say Company. During the annual goodwill impairment test, the following information pertaining to Say was noted:  The amount of goodwill impairment loss that would be recorded on Prossart's books would be:
A)$200,000 
B)$140,000 
C)$100,000 
D)$70,000

Quizplus · Accepted Answer

Results of impairment test:
The book value of Say's net assets exceeds the fair value of the company.
Calculation of impairment loss:
 11eb11de_932c_54cc_ad38_5dc3f97f692b_TB2014_00 Prossart will record $70,000 ($100,000 x 70%) on its books. The remaining 30% will be booked to the NCI on the consolidating worksheet.

Prossart Company Owned 70% of the Outstanding Stock of Say