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Compute the amount of goodwill

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Reference no: EM131783995

In 2015, Giant Corp. purchased 100% of the assets and liabilities of Mini Ltd.for a cash price of $360,000:

Book Value Fair Market Value

Accounts Receivable (net) $100,000 $100,000

Inventory 180,000 160,000

PP&E (net) 700,000 720,000

Land 20,000 60,000

Liabilities 700,000 700,000

Required

1. Compute the amount of goodwill that will be recorded for the purchase of Mini Ltd

2. Give the journal entry for Giant to record the purchase

3. Assume Mini becomes a cash generating unit of Giant Corp. after the acquisition, and Giant Corp. is a public company that uses IFRS. In 2016, the fair value of Mini is estimated at $350,000; the value in use is $320,000; the costs to sell would be $5,000. Determine whether there is any impairment inMini, and prepare any journal entry, if necessary

Reference no: EM131783995

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