Telecom Inc Has Decided to Purchase the Shares of Intron

Essay

Telecom Inc has decided to purchase the shares of Intron Inc. for $300, 000 in Cash on July 1, 2018. On the date, the balance sheets of each of these companies were as follows: $$\begin{array} { | l | l | l | } \hline & \text { Telecom Inc } & \text { Intron Inc } \\\hline & & \\\hline \text { Cash and Short-Term Securities } & \$ 920,000 & \$ 200,000 \\\hline \text { Inuentory } & \$ 150,000 & \$ 20,000 \\\hline \text { Plant and Equipment (net) } & \$ 330,000 & \$ 180,000 \\\hline \text { Total Assets } & \$ 1,400,000 & \$ 400,000 \\\hline & & \\\hline \text { Current Liabilities } & \$ 420,000 & \$ 90,000 \\\hline \text { Bonds Payable } & \$ 700,000 & \$ 200,000 \\\hline \text { Common Shares } & \$ 180,000 & \$ 60,000 \\\hline \text { Retained Earnings } & \$ 100,000 & \$ 50,000 \\\hline \text { Total Labilities and Equiby } & \$ 1,400,000 & \$ 400,000 \\\hline\end{array}$$ On that date, the fair values of Intron's assets and liabilities were as follows:
$$\begin{array} { | l | l | } \hline \text { CashiShort-Term Securities } & \$ 200,000 \\\hline \text { Inventory } & \$ 15,000 \\\hline \text { Plant and Equipment (net) } & \$ 250,000 \\\hline \text { Current Liabilities } & \$ 90,000 \\\hline \text { Bonds Payable } & \$ 210,000 \\\hline\end{array}$$ Assume that two days after the acquisition, the Goodwill was put to an impairment test, after which it was decided that its true value was $70,000.
Required:
Prepare the necessary journal entry to write-down the goodwill as well as another Consolidated Balance Sheet to reflect the new Goodwill amount.