KHR Ltd acquired a business consisting of 3 cash-generating units: HNE, DGH and ATR. There is no reasonable way of allocating the resulting goodwill to them. After a number of years, the carrying amount and the recoverable amount of the net assets of the CGUs, togetherwith the purchased goodwill (calculated using the full goodwill method), are as follows: HNE ATR Carrying Amount Recoverable Amount Frw 1,440,000 1,800,000 DGH Frw 2,160,000 1,700,000 Required: 1. Produce the revised values of Cash Generating Units here above 2. Make proper journal entries Frw 2,520,000 2,160,000 Goodwill Frw 900,000 Total Frw 7,020,000 5,660,000

KHR Ltd acquired a business consisting of 3 cash-generating units: HNE, DGH and ATR. There is no reasonable way of allocating the resulting goodwill to them. After a number of years, the carrying amount and the recoverable amount of the net assets of the CGUs, togetherwith the purchased goodwill (calculated using the full goodwill method), are as follows: HNE ATR Carrying Amount Recoverable Amount Frw 1,440,000 1,800,000 DGH Frw 2,160,000 1,700,000 Required: 1. Produce the revised values of Cash Generating Units here above 2. Make proper journal entries Frw 2,520,000 2,160,000 Goodwill Frw 900,000 Total Frw 7,020,000 5,660,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanans journal entry to record the purchase of McLaren? C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren?
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