On January 1, 2020, Credit Incorporated recorded goodwill valued at $270,000 when it acquired the assets of another company. At the end of 2020, the auditors of Credit Incorporated determined that the goodwill had been impaired by $50,000, and Credit Incorporated wrote down the book value of the goodwill by $50,000. During 2021, the goodwill was not further impaired. In 2022, additional goodwill was impaired and was written down another $18,000 for financial reporting purposes. What is the temporary book-tax difference associated with the purchased goodwill in 2020, 2021, and 2022? Are the differences favorable or unfavorable? Are the differences permanent or temporary?

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The Answer of On January 1, 2020, Credit Incorporated recorded goodwill valued at $270,000 when it acquired the assets of another company. At the end of 2020, the auditors of Credit Incorporated determined that the goodwill had been impaired by $50,000, and Credit Incorporated wrote down the book value of the goodwill by $50,000. During 2021, the goodwill was not further impaired. In 2022, additional goodwill was impaired and was written down another $18,000 for financial reporting purposes. What is the temporary book-tax difference associated with the purchased goodwill in 2020, 2021, and 2022? Are the differences favorable or unfavorable? Are the differences permanent or temporary?

On January 1, 2020, Credit Incorporated Recorded Goodwill Valued at $270,000