Regular Corp. has four divisions. One of them, Zolo Products, was acquired on January 1, 2016, for $400,000,000, and recorded goodwill of $50,750,000 as a result of that purchase. At December 31, 2016, Zolo Products had a recoverable amount of $375,000,000. The carrying value of the company’s net assets at December 31, 2016 was $355,000,000 (including goodwill). What amount of loss on impairment of goodwill should Regular record in 2016?
A. $45,000,000
B. $25,000,000
C. $20,000,000
D. -0-
Answer:D
Regular Corp. has four divisions. One of them, Zolo Products, was acquired on January 1, 2016, for $400,000,000, and recorded goodwill of $50,750,000 as a result of that purchase. At December 31, 2016, Zolo Products had a recoverable amount of $375,000,000. The carrying value of the company’s net assets at December 31, 2016 was $355,000,000 (including goodwill). What amount of loss on impairment of goodwill should Regular record in 2016?
A. $45,000,000 B. $25,000,000 C. $20,000,000 D. -0-