Reference no: EM133098748
Question - On March 31, 2021, Marathon Company decided to expand its operations by purchasing the assets and liabilities of Schreiber Corporation for a cash payment of $1,015,453. Following are the book values and fair values of each of the assets and liabilities of Schreiber Corporation on March 31, 2021:
|
Description
|
Book Value
|
Fair Value
|
|
Cash
|
$44,111
|
$44,111
|
|
Notes receivable
|
101,300
|
97,840
|
|
Land
|
64,300
|
188,900
|
|
Building
|
257,200
|
699,630
|
|
Accounts payable
|
15,120
|
15,120
|
|
Notes payable
|
77,200
|
77,200
|
Marathon Company is a private corporation that follows ASPE.
All of the assets and liabilities purchased are allocated to a single reporting unit, known as the Schreiber Division.
On December 31, 2022, the following information is available about the net assets of the Schreiber Division:
Carrying value of net assets $1,031,400
Fair value less costs to sell of net assets 909,359
Value in use of net assets 945,600
Fair value of net assets 957,220
Required -
1. Prepare the journal entry for Marathon Company's purchase of the net assets of Schreiber Corporation on March 31, 2021.
2. Determine if there is any impairment of goodwill for the Schreiber Division and prepare any necessary journal entry on December 31, 2022.