Strawberry Fields Farms has four cash-generating units as follow:
a. Strawberry Farming: worth $4 million
b. Boysenberry Farming: worth $2.0 million
c. Raspberry Farming: worth $4.2 million
d. Blueberry Farming: worth $3.8 million
This year, Strawberry Fields Farms decided to move the company in a different direction. They decided to discontinue the boysenberry CGU due to low demand. They also decided to purchase John's Jams, which produces blueberry and raspberry preserves. $5 million in goodwill was accrued by Strawberry Fields Farms as a result. How should Strawberry Fields Farms allocate the goodwill amongst its CGUs?
Correct Answer:
Verified
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