part a compute the amount of goodwill recognized if any on J

part a:
compute the amount of goodwill recognized, if any, on July 31,2017.

part b:
determine the impairment loss, if any, on December 31, 2017.

Solution

(a) Amount of Goodwill recognized, if any, on July 31, 2017 :-

Goodwill = Excess of the cost of the division over the fair value of the identifiable assets

      = 2850000 – 2500000 = $350000

(b) Determine the impairment loss, if any, on December 31, 2017:-

No impairment loss is recorded, because the fair value of the conchita ($1850000) is greater than carrying value of the net assets ($1600000)