Following Its Acquisition of the Net Assets of Dan Company

question 14

Multiple Choice

Following its acquisition of the net assets of Dan Company, Empire Company assigned goodwill of $60,000 to one of the reporting divisions. Information for this division follows:

-Based on the preceding information,what amount of goodwill impairment will be recognized for this division if its fair value is determined to be $195,000?

• A) $5,000
• B) $30,000
• C) $60,000
• D) $55,000

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Definitions:

Conduction

Transfer of thermal energy by direct contact.

Transformation

The process of change in form, appearance, nature, or character.

Convergence

The coming together of tectonic plates, often resulting in mountain building, earthquakes, and volcanic activity.

Divergence

The movement away from each other of tectonic plates at a divergent boundary, typically resulting in the formation of new crust.