Determine the book value of the goodwill

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On January 1, 2005, StreetSmart Financial, Inc., purchased the assets of NIT Insurance Co. for $40,000,000, a price reflecting a$15,000,000 goodwill premium. On December 31, 2008,StreetSmart determined that the goodwill from the NIT acquisition was impaired and had a value of only $9,000,000.

Determine the book value of the goodwill on December 31, 2008, prior to making the impairment adjustment.

Illustrate the effects on the accounts and financial statements of the December 31, 2008, adjustment for the goodwill impairment.

Reference no: EM13257656

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