Tokyo Enterprises Has Four Divisions

question 111

Multiple Choice

Tokyo Enterprises has four divisions.It acquired on of them, Green Products, on January 1, 2011 for ¥480,000,000, and recorded goodwill of ¥60,900 as a result of that purchase.At December 31, 2011, Green Products had a recoverable amount of ¥444,000,000.The carrying value of the Company's net assets at December 31, 2011 was ¥426,000,000(including goodwill) .What amount of loss on impairment of goodwill should Tokyo record in 2011?

• A)¥ -0-
• B)¥18,000,000
• C)¥36,000,000
• D)¥54,000,000

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Definitions:

Monthly

Pertaining to something that occurs, is calculated, or reported every month.

Variable Expense

An expense that changes in proportion to production output or sales.

Target Profit

The amount of net income a company aims to achieve for a specific period by setting certain sales targets and cost controls.

Monthly

Pertaining to something that occurs, is done, or calculated on a month-to-month basis.