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On January 1, 2021, Buyer Inc. paid $ 30,000,000 of cash in… On January 1, 2021, Buyer Inc. paid $ 30,000,000 of cash in exchange for 100 % of the outstanding common stock of Seller Corp. Prior to the acquisition, Buyer, Inc. had only one operating division, “Distribution”, and Seller only had one division, Manufacturing.     Book Values and Fair Values of the assets and liabilities of Seller Corp. (all of which pertain to Manufacturing) at various points in time follow.  Please note that the “Book Values” are indicated per the financial statements of Seller, which may not reflect the applicable amounts that appear on the consolidated financial statements. (numbers are in millions):                                                        Seller Corp – Assets & Liabilities                                           Book Value      Fair Value          Book Value        Fair Value                                                1/1/21               1/1/21               12/31/21            12/31/21Cash                                             1.0                   1.0                      2.0                       2.0Inventory                                      5.0                   5.0                      6.4                       6.4 Property & Equipment               12.0                 17.0                    10.8                     13.5Patent                                           0.0                  0.0                       0.0                       1.4 Accts. Payable                              3.0                   3.0                     2.0                        2.0      Since Seller Corp. uses FIFO as their Inventory Method, the Book Value and Fair Value of their Inventory is approximately equal at any point in time.  Seller depreciates their PP&E using the straight line method with a salvage value of $ 0, and as of January 1, 2021, the PP&E of Seller was expected to last ten more years.  On July 1, 2021, Seller Corp. received a patent on a new production technology, the patent was developed internally.     Of the purchase price, Buyer decided to allocate $ 26,000,000 to the Manufacturing Operations acquired from Seller, and decided to allocate $ 4,000,000 to their previously existing Distribution Division, which was now expected to be much more profitable as a result of the acquisition.  Buyer had no Goodwill on their books prior to the purchase of Seller.     Net Income for the Manufacturing Division (i.e. Seller Corp.) for various time periods prior to and subsequent to the acquisition were as follows:                                                             Year-Ending        Year-Ending          Year-Ending                                                           Dec. 31, 2019      Dec. 31, 2020         Dec. 31, 2021Manufacturing Unit (Seller Corp.)      $  2,000,000         $ 2,600,000           $  2,200,000     During this time period, Seller Corp did not pay any dividends.     Stock Market “Multiples” (of Net Income) for Manufacturing and Distribution Firms in this industry at various points in time are as follows:                                                       Stock Market Multiples (of Net Income) @                                                  Dec. 31, 2019      Dec. 31, 2020         Dec. 31, 2021   Distribution Firms                            12 x                     10 x                        10 x   Manufacturing Firms                          8 x                     10 x                        10 x                            Based on the information provided, please answer the following questions:         Buyer, Inc. adopted ASU 2017-04, “Simplifying Goodwill Impairment Testing”, on January 1, 2019  A.    Immediately after the acquisition, Goodwill would be allocated to Reporting            Units as follows:                 (2)  Manufacturing Division     _____________________                  (2)  Distribution Division         _____________________         B.    As of December 31, 2021, what is the carrying value of the “Manufacturing”            Reporting Unit (i.e. Seller Corp) to be used for purposes of Goodwill           Impairment testing?     C.        Assuming that you are required to perform the entire Goodwill Impairment             test, as of December 31, 2021, is the Goodwill of the Manufacturing Division              impaired?  Why or why not?                   If you determined that Goodwill of the Manufacturing Reporting Unit is             “impaired” as of Dec. 31, 2018, at what amount, if any, would the Goodwill             of that reporting unit be reported?                     If you determined that Goodwill was not impaired, what is the lowest market             multiple that you could have observed and still not have reported an impairment?        D.         How was it possible for JDS Uniphase to record a Goodwill Impairment of more than $ 50 Billion when at the end of the             previous fiscal year, the Total Assets on their Balance Sheet were only $ 26 Billion?   Accounting Business Financial Accounting ACCT 8503

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