Jenks Corporation Acquired Linebrink Products on January 1, 2015 for $8,000,000

question 57

Multiple Choice

Jenks Corporation acquired Linebrink Products on January 1, 2015 for $8,000,000, and recorded goodwill of $1,500,000 as a result of that purchase. At December 31, 2015, Linebrink Products had a fair value of $6,800,000. The net identifiable assets of the Linebrink (excluding goodwill) had a fair value of $5,800,000 at that time. What amount of loss on impairment of goodwill should Jenks record in 2015?

• A) $ -0-
• B) $500,000
• C) $700,000
• D) $1,200,000

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Definitions:

Self-Actualization

The achievement or actualization of individual talents and capabilities, seen as an innate motivation or necessity in everyone.

Herzberg

Refers to Frederick Herzberg, an American psychologist best known for the Motivation-Hygiene Theory, which suggests that certain factors in the workplace lead to job satisfaction while a separate set of factors cause dissatisfaction.

Job Security

A condition in which an individual has a high likelihood of remaining employed without the risk of becoming unemployed.

Recognition

The act of acknowledging or identifying something as valid or as having a particular status.