In 2017, Dooling Corporation Acquired Oxford Inc

question 53

Essay

In 2017, Dooling Corporation acquired Oxford Inc. for $250 million, of which $50 million was attributed to goodwill. At the end of 2018, Dooling's accountants derive the following information for a required goodwill impairment test:

-Assume the same facts as above, except that the fair value of Oxford (the reporting unit) is $225 million.
Required: Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize on these assets.

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Definitions:

Accounts Payable

Liabilities to creditors that must be paid within a short period, usually less than a year.

Operating Activities

Activities that constitute the primary or main activities of an organization, including production, sales, and delivery of services.

Cash Dividend

A cash distribution given to shareholders from the company's earnings.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time.