1. A company reports $11.2 million in goodwill and decides to quantitatively test it for impairment at the end of 2020. The following information is collected: Division 1 Division 2 Division 3 Book value of goodwill $ 7,000,000 $ 200,000 $ 4,000,000 Fair value of division 40,000,000 6,000,000 20,000,000 Book value of division 45,000,000 6,500,000 21,000,000 2. What is the amount of goodwill impairment loss for 2020, following U. S. GAAP? A. $ 6,200,000 B. $ 6,500,000 C. $11,200,000 D. $ 6,000,000

B. $ 6,500,000

Explanation:

The goodwill impairment loss for the year 2020 shall be determined through the following mentioned equation:

Goodwill impairment loss=Book value of all the divisions-Fair Value of all the divisions

Book value of all the divisions=$45,000,000+$6,500,000+$21,000,000

                                                   =$72,500,000

Fair value of all the divisions= $40,000,000+$6,000,000+$20,000,000

                                                 =$66,000,000

Goodwill impairment loss=$72,500,000-$66,000,000

                                           =$6,500,000

So based on the above discussion, the answer is B. $ 6,500,000

answer; (consensus);

answer; 20% is your answer;