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On May 1, 2011, Walker Company (a US company) paid US$4,500,000 to acquire all of the common stock of Hayden Corporation (an Australian company), which now became a division of Walker.

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Question 1On May 1, 2011, Walker Company (a US company) paid

US$4,500,000 to acquire all of the common stock of Hayden Corporation (an Australian company), which now became a division of Walker. Hayden reported the following US$ balance sheet at the time of the acquisition:

 Book Value $

 Fair Value $

Current Assets

900,000

1,500,000

Noncurrent Assets                                      

2,700,000

2,300,000

Current liabilities

(600,000)

(700,000)

Long-term liabilities

(500,000)

(400,000)

At December 31, 2011, Hayden reports the following US$ balance sheet information:

 Book Value $

 Fair Value $

Current Assets

700,000

800,000

Noncurrent Assets (excluding Goodwill)                                

1,200,000

1,300,000

Current liabilities

(600,000)

(700,000)

Long-term liabilities

(500,000)

(400,000)

During the annual impairment test conducted on December 31, 2011, it was determined that the fair value of the Hayden division as a whole was $2,800,000.

Required:

(a)    Compute the amount of goodwill recognized, if any, on May 1, 2011.        

(b)   Determine the impairment loss, if any, to be recorded on December 31, 2011.    

(c)    Determine the implied fair value of goodwill on December 31, 2011.                       

(d)   On the assumption that the fair value of Hayden on December 31, 2011 was $1,950,000 instead of $2,800,000, determine the impairment loss, if any, to be recorded.

Question 2

(a) In 2017, there was an Accounting Standards Update which aimed to simplify the test for Goodwill Impairment. Briefly summarize the main provision(s) of this update, and please include the effective date.

(b) How would your answer to Question 1, part (d) change if you were basing it on the 2017 Accounting Standards Update?

 
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On May 1, 2011, Walker Company (a US company) paid US$4,500,000 to acquire all of the common stock of Hayden Corporation (an Australian company), which now became a division of Walker.

/in /by

Question 1 On May 1, 2011, Walker Company (a US company) paid US$4,500,000 to acquire all of the common

stock of Hayden Corporation (an Australian company), which now became a division of Walker. Hayden reported the following US$ balance sheet at the time of the acquisition:

                                              Book Value $                     Fair Value $

Current Assets                 900,000                                1,500,000

Noncurrent Assets         2,700,000                            2,300,000

Current liabilities             (600,000)                            (700,000)

Long-term liabilities        (500,000)                            (400,000)

At December 31, 2011, Hayden reports the following US$ balance sheet information:

Book Value $                     Fair Value $

Current Assets                 700,000                                800,000

Noncurrent Assets          1,200,000                            1,300,000

(excluding Goodwill)

Current liabilities             (600,000)                            (700,000)

Long-term liabilities        (500,000)                            (400,000)

During the annual impairment test conducted on December 31, 2011, it was determined that the fair value of the Hayden division as a whole was $2,800,000.

Required:

(a)   Compute the amount of goodwill recognized, if any, on May 1, 2011.              

(b)  Determine the impairment loss, if any, to be recorded on December 31, 2011.      

(c)   Determine the implied fair value of goodwill on December 31, 2011.                       

(d)  On the assumption that the fair value of Hayden on December 31, 2011 was $1,950,000 instead of $2,800,000, determine the impairment loss, if any, to be recorded.

 
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survival of an organism

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Question

<ul><li>Which is more important in the survival of an organism— genetic traits passed on by parents

or non-genetic factors outside of the organism?</li></ul>

 
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You work as an accountant at a large ânot-for-profit- business orientedâ hospital. You report directly to the Chief Accounting Officer. The hospitalâs Chief Compliance Officer just informed the accounting team that a surgeon left behind an instrument in a patientâs body in the course of a surgery.

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You work as an accountant at a large ânot-for-profit- business orientedâ hospital. You report directly to the

Chief Accounting Officer. The hospitalâs Chief Compliance Officer just informed the accounting team that a surgeon left behind an instrument in a patientâs body in the course of a surgery. The hospitalâs legal counsel informed the accounting team that the hospital is certain to be sued. The Hospitalâs Board of Directors is very concerned on how this event might affect the hospitalâs financial statements. The Chief Accounting Officer has requested that you write a brief and concise memo (around 250 words) that will be presented to the board on how this incident could affect the financials. 

You recall from your student days that contingencies are discussed in Statement of Financial Accounting Standards # 5. See link http://www.fasb.org/pdf/fas5.pdf 

Please present your memo in this discussion forum.

 
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