Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?
A) $7,000
B) $8,000
C) goodwill is not amortized
D) not enough information to calculate amortization

Question

Quizplus · Accepted Answer

Goodwill is not amortized under current accounting standards. Instead, it is tested annually for impairment.

Xtra Company Purchased a Business from Argus for $96,000 Above