Question

In: Accounting

Does this company has impairment and if it does what is the amount of impairment?

MPC company purchased CPC Division for $600,000.

Fair value of CPC Division $5,700,000.

-Book value of assets and liabilities are (at end of second year as follows):

cash $600,000

A/R $900,000

Inventory $2,100,000

Build $2,400,000

Goodwill $2,700,000

A/P ($1,500,000)

Q) Does this company has impairment and if it does what is the amount of impairment?(goodwill implied|).

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