In 2007, Quasar LTD

question 17

Essay

In 2007, Quasar LTD. acquired all of the common stock of Penlight Laser for $124 million. The fair value of Penlight's identifiable tangible and intangible assets totaled $205 million, and the fair value of liabilities assumed by Quasar was $95 million. Quasar performed the required goodwill impairment test at the end of its fiscal year ended December 31, 2009. Management has provided the following information:
Required:
1. Determine the amount of goodwill that resulted from the Penlight acquisition.
2. Determine the amount of goodwill impairment loss that Quasar should recognize at the end of 2009, if any.
3. If an impairment loss is required, prepare the journal entry to record the loss.
$\begin{array}{lr}\text { Fair value of Penlight } & \text { \$115 million } \\\text { Fair value of Penlight's net assets (excluding goodwill) } & 107 \text { million } \\\text { Book value of Penlight's net assets (including goodwill) } & 125 \text { million }\end{array}$

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Definitions:

Overimitate

The process of imitating actions or behaviors more precisely or more extensively than required, often observed in children.

Irrelevant Behavior

Actions or responses that do not pertain to or have any bearing on the current context or goals.

Mindlessly Copy

To imitate or replicate something without thoughtful consideration or awareness of the consequences.

Fast-Mapping

is a cognitive process by which children rapidly connect new words with their meanings after minimal exposure, contributing to rapid vocabulary expansion.