Reference no: EM132793943

Gold Company acquired another entity in a business combination at the beginning of the year. As a result of the combination, the following amounts of goodwill were recorded for each of the three reporting units of the acquiree:

Retailing           300,000

Service              200,000

Financing              400,000

Near the end of current year, a new major competitor entered the entity's market and the entity was concerned that this might cause a significant decline in the value of goodwill.

Accordingly, the entity computed the implied value of the goodwill for the three major reporting units at year-end as follows:

Retailing            250,000

Service            100,000

Financing           600,000

Problem 1: What is the impairment of goodwill attributable to Retailing unit?

a.250,000

b.300,000

c.50,000

d.0

Problem 2: What is the impairment of goodwill attributable to Service unit?

a. 200,000

b. 100,000

c. 300,000

d. 0

Problem 3: What is the impairment of goodwill attributable to Financing unit?

a. 400,000

b. 600,000

c. 200,000

d. 0