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Compute the amount of goodwill impairment

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Question - Pet Company recently acquired two businesses, Boat and Tree, recognizing goodwill in each acquisition. Pet has allocated the acquired goodwill to both of its reporting units. Pet provides the following information for performing its 2020 annual review for Goodwill impairment:

Subsidiary

Total Fair Value of the Subsidiary

boat - $285,000

tree - $225,000

Fair Value of the Subsidiary's Identifiable Net Assets

boat - 390,000

tree - 215,000

Carrying Value of the Subsidiary's Total Net Assets (Including Goodwill)

boat - 370,000

tree - 230,000

Carrying Value of the Allocated Goodwill

boat - 50,000

tree - 75,000

Pet has decided to forgo the qualitative test for goodwill impairment and instead to go directly to the quantitative test.

Required - Compute the amount of goodwill impairment (if any) that Pet must include in the Consolidated Income Statement for 2020.

Reference no: EM132642096

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