Joyful sound music company purchased the net assets i

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Joyful Sound Music Company purchased the net assets (i. e.,assets minus liabilities) of Metrodome Company for $ 845,000.Metrodome is a retailer of music, instruments, and related items.Its net assets have been carried on its own books at a total of $530,000. An appraisal of all of Metrodomes assets and liabilitiesrevealed a net fair market value of $ 783,000. Joyful is willing topay extra because of Metrodomes very loyal retail customers, mostof whom have dealt exclusively with the company for more than 30years.

(a) What is the amount of goodwill that Joyful should record at acquisition of Metrodome?

(b) What might cause the purchased goodwill in this situation to become impaired?

Reference no: EM13615546

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