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QUESTION

It is determined that the fair market value of the Dryer division is $1,250,000.

It is determined that the fair market value of the Dryer division is $1,250,000. The recorded amount for Dryers net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value of $150,000 above the carrying value.InstructionsCompute the amount of goodwill recognized, if any, on May 31, 2004.Determine the impairment loss, if any, to be recorded on December 31, 2004.Assume that the fair value of the Dryer division is $1,100,000 instead of $1,250,000. Prepare the journal entry to record the impairment loss, if any, on December 31, 2004.

It is determined that the fair market value of the Dryer division is $1,250,000. The recorded amount for Dryer’s net assets (excluding goodwill) is the same as fair value, except for property,...
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