Parsons Company acquired 90% of Roxy Company several years ago for which the consideration transferred included an amount paid for goodwill of $200,000 at that date. During 2020 an analysis of the fair value of Roxy's assets determined an impairment of goodwill in the amount of $50,000.At what amount would consolidated goodwill be reported for 2020?
A) $150,000.
B) $200,000.
C) $50,000.
D) $0.
E) $135,000.

Question

Quizplus · Accepted Answer

The original goodwill was $200,000. After recognizing the impairment loss of $50,000, the consolidated goodwill would be reported at $150,000 ($200,000 - $50,000).

Parsons Company Acquired 90% of Roxy Company Several Years Ago