During 2009, Lexie, Inc. acquired Lena, Inc. for $10,000,000. The fair market value of the net assets of Lena, Inc. was $8,500,000 on the date of purchase. During 2012, Lexie, Inc. determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.
(a) Determine the amount of goodwill implied during 2009.
(b) IIIustrate the effects on the accounts and the finencial statements of the December 31,2012, adjustment for the goodwill impairment.

Question

During 2009, Lexie, Inc. acquired Lena, Inc. for $10,000,000. The fair market value of the net assets of Lena, Inc. was $8,500,000 on the date of purchase. During 2012, Lexie, Inc. determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.
 (a) Determine the amount of goodwill implied during 2009.
(b) IIIustrate the effects on the accounts and the finencial statements of the December 31,2012, adjustment for the goodwill impairment.

Quizplus · Accepted Answer

The Answer of During 2009, Lexie, Inc. acquired Lena, Inc. for $10,000,000. The fair market value of the net assets of Lena, Inc. was $8,500,000 on the date of purchase. During 2012, Lexie, Inc. determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.
 (a) Determine the amount of goodwill implied during 2009.
(b) IIIustrate the effects on the accounts and the finencial statements of the December 31,2012, adjustment for the goodwill impairment.