What is the journal entry to record the alfonsos assets

Reference no: EM133360377

Case: Alfonso Inc. acquired 100 percent of the voting shares of BelAire Company on January 1, 2020. In exchange, Alfonso paid $69,750 in cash and issued 100,000 shares of its own $1 par value common stock. On this date, Alfonso's stock had a fair value of $15 per share. The combination is a statutory merger with BelAire subsequently dissolved as a legal corporation. BelAire's assets and liabilities are assigned to a new reporting unit.

The following shows fair values for the BelAire reporting unit for January 1, 2020 along with respective carrying amounts on December 31, 2021.

BelAire Reporting UnitFair Values
1/1/20Carrying Amounts
12/31/21Cash$66,500 $40,500 Receivables 191,250 235,500 Inventory 223,500 250,500 Patents 303,500 390,500 Customer relationships 663,000 624,000 Equipment (net) 334,500 266,000 Goodwill ? 496,000 Accounts payable (142,500) (231,000)Long-term liabilities (566,000) (508,000)
Note: Parentheses indicate a credit balance.

What is the journal entry to record the Alfonso's assets acquired and the liabilities assumed in the BelAire merger on January 1, 2020?

Note: Enter cash paid and cash received as two separate amounts.

On December 31, 2021, Alfonso opts to forgo any goodwill impairment qualitative assessment and estimates that the total fair value of the entire BelAire reporting unit is $1,330,000. What amount of goodwill impairment, if any, should Alfonso recognize on its 2021 income statement?

Reference no: EM133360377

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