Determine the amounts of the goodwill write-offs

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Reference no: EM13514733

Acquirer Company bought Servile Company for $5,000,000 on January 2, 2004. The fair market value of the individual net assets was $3,500,000. In succeeding years, the fair market value of Servile's costs and goodwill were as follows:

Year

Fair Market

Value of

Servile

Cost of Servile's

Net Assets and

Goodwill

2005

$7,000,000

$7,100,000

2006

7,300,000

6,700,000

2007

8,000,000

9,300,000

Required:

a. What amount of goodwill should be recognized as a result of the acquisition of Servile in 2004?

b. Determine the amounts of the goodwill write-offs (if any) in 2005, 2006, and 2007.

Reference no: EM13514733

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