Twilight Corporation acquired End-of-the-World Products on January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as a result of that purchase. At December 31, 2008, the End-of-the-World Products Division had a fair value of $1,700,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $1,450,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2008?
A) $0
B) $125,000
C) $175,000
D) $300,000

Question

Quizplus · Accepted Answer

$1,700,000 - $1,450,000 = $250,000 
$375,000 - $250,000 = $125,000.

Twilight Corporation Acquired End-Of-The-World Products on January 1, 2008 for $2,000,000