Homework SourseMill Corporation acquired 100 percent ownership of Roller Co
Mill Corporation acquired 100 percent ownership of Roller Company on January 1, 20X8, for $119,500. At that date, the fair value of Roller\'s buildings and equipment was $19,000 more than the book value. Accumulated depreciation on this date was $16,000. Buildings and equipment are depreciated on a 5-year basis. Although goodwill is not amortized, Mill’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Roller shares had been impaired and the correct carrying value was $2,800. No additional impairment occurred in 20X9.
| Mill Corporation acquired 100 percent ownership of Roller Company on January 1, 20X8, for $119,500. At that date, the fair value of Roller\'s buildings and equipment was $19,000 more than the book value. Accumulated depreciation on this date was $16,000. Buildings and equipment are depreciated on a 5-year basis. Although goodwill is not amortized, Mill’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Roller shares had been impaired and the correct carrying value was $2,800. No additional impairment occurred in 20X9. |
Solution
Dr. Buildings and Equipment 19,000
Dr. Goodwill 2,800
Cr. Accumulated Depreciation 16000
Cr. Investment in Roller Company 5800
