Question 21several years ago blaha company buys husker

Reference no: EM13348897

Question 21:

Several years ago, Blaha Company buys Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $100,000 related to the purchase. Since that time, the company has not taken the goodwill to be impaired. Thus, at the end of 2013, Blaha decides to determine the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (adding the goodwill) of $800,000. Blaha determine that the fair value of Husker is $720,000, of which it allocates $660,000 to the Husker's particular assets and liabilities.

1. Purpose the journal entry for Blaha to record the impairment of its goodwill at the end of 2013.

2. Suppose that Blaha uses IFRS and has evaluated the recoverable amount of Husker (which qualifies as a cash generating unit) to be $740,000. Evaluate the journal entry for Blaha to record the impairment of its goodwill at the end of 2013.

Reference no: EM13348897

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