Essay
During 2009, Lexie, Inc. acquired Lena, Inc. for $10,000,000. The fair market value of the net assets of Lena, Inc. was $8,500,000 on the date of purchase. During 2012, Lexie, Inc. determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.
(a) Determine the amount of goodwill implied during 2009.
(b) IIIustrate the effects on the accounts and the finencial statements of the December 31,2012, adjustment for the goodwill impairment.
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