Company a Purchased a 90% Interest in Company B in 2016

Essay

Company A purchased a 90% interest in Company B in 2016 with total subsidiary goodwill of $135,000.Assume the investment amount exceeded the fair value of the subsidiary with the subsidiary book value based on acquisition date, amortized balances on December 31, 2019 of $1,000,000.The estimated fair value of Company B of $1,035,000 and the estimated fair value of net identifiable assets of $1,000,000.Select the following which is applies to the above transaction:
?
Goodwill is not impaired and no loss is calculated.
Goodwill is impaired and a Goodwill impairment loss of $100,000 is calculated.
All of the goodwill of $135,000 needs to be written off.
Goodwill is impaired and a Goodwill impairment loss of $35,000 is calculated.