Amount of goodwill to be amortized


On January 1, 2013 Rock Company purchased the net assets of Stone Company for $1,200,000. Stone's book value of the net assets amount to $950,000, while the fair market value of the net assets amount to $1,100,000. Rock tested their intangible assets for impairment on 12/31/2013 and found the implied value of goodwill to be greater than the carrying value of goodwill by $50,000. The amount of goodwill to be amortized as an impairment loss in 2013 is

a. $0 - there should be no goodwill recorded.

b. $0 - the goodwill's implied value is greater than the carrying value.

c. $50,000.

d. none of the above answers (a, b, or c).

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Accounting Basics: Amount of goodwill to be amortized
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