Pritchett Company Recently Acquired Three Businesses, Recognizing Goodwill in Each

question 86

Essay

Pritchett Company recently acquired three businesses, recognizing goodwill in each acquisition. Destin has allocated its acquired goodwill to its three reporting units: Apple, Banana, and Carrot. Pritchett provides the following information in performing the 2013 annual review for impairment: How much goodwill impairment should Pritchett report for 2013?
Goodwill Impairment Test-Step 2 (Apple and Carrot only)

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Definitions:

Expected Value

The expected value of a random variable is the long-run average value of repetitions of the experiment it represents.

Normal Approximation

A method used to estimate the probabilities of a binomial distribution by approximating it with a normal distribution, especially useful for large sample sizes.

Binomial Distribution

An analytical model that represents the probability of a variable adopting one out of two distinct values, contingent upon specified parameters.

Radio Listeners

Individuals who tune in to radio broadcasts or programs.