Telecom Inc Has Decided to Purchase the Shares of Intron

question 14

Essay

Telecom Inc has decided to purchase the shares of Intron Inc. for $300, 000 in Cash on July 1,2012. On the date, the balance sheets of each of these companies were as follows: On that date, the fair values of Intron's Assets and Liabilities were as follows: Assume that two days after the acquisition, the Goodwill was put to an impairment test, after which it was decided that its true value was $70,000. Prepare the necessary journal entry to write-down the goodwill as well as another Consolidated Balance Sheet to reflect the new Goodwill amount.