Reference no: EM132618093
Problem 1: Soft Limited acquired all the shares in Rain Limited for a $450,000 cash consideration on 1 July 2023. Goodwill of $22,000 was recognised at acquisition date. During the year for the period ending 30 June 2025, acquired goodwill was regarded as having become impaired by $17 000. The appropriate consolidation adjustment in relation to the impairment will include the following line:
Select one:
Option a.
Dr Impairment loss $ 17,000
Cr Accumulated impairment $ 17,000
Option b.
Dr Impairment loss $ 17,000
Cr Goodwill $ 17,000
Option c.
Dr Impairment loss $ 22,000
Cr Accumulated impairment $ 22,000
Option d.
Dr Retained earnings (at 1 July 2022) $ 17,000
Cr Accumulated impairment $ 17,000
Option e.
Dr Retained earnings (at 1 July 2022) $ 22,000
Cr Goodwill $ 22,000