Homework Clinic

Social Science Clinic => Accounting => Topic started by: mynx on Feb 18, 2020

Title: Coyote Company acquired Wolfe, Inc. three years ago, and the purchase included $88,000 of goodwill. ...
Post by: mynx on Feb 18, 2020

Coyote Company acquired Wolfe, Inc. three years ago, and the purchase included $88,000 of goodwill. Wolfe's goodwill now has a fair value of $73,920 - how would Coyote account for this difference?
◦ A journal entry will be made - debiting Loss on Impairment of Goodwill for $14,080 and crediting Goodwill for $14,080.
◦ Goodwill is amortized - usually on a straight-line basis, so the annual amortization will be adjusted.
◦ The account Goodwill will be debited for $14,080 and Loss on Goodwill will be credited for $14,080.
◦ The difference will be written off using an allowance account.

Title: Coyote Company acquired Wolfe, Inc. three years ago, and the purchase included $88,000 of goodwill. ...
Post by: momolu on Feb 18, 2020

A journal entry will be made - debiting Loss on Impairment of Goodwill for $14,080 and crediting Goodwill for $14,080.

Title: Re: Coyote Company acquired Wolfe, Inc. three years ago, and the purchase included $88,000 of goodwi
Post by: Alison Catlin on May 2, 2022

thanks