Hawkeye Corporation acquired 75 percent of Gopher Company’s ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Gopher’s net assets at acquisition was $100,000. The book values and fair values of Gopher’s assets and liabilities were equal, except for Gopher’s buildings and equipment, which were worth $20,000 more than book value. Accumulated depreciation on the buildings and equipment was $30,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Hawkeye concluded at December 31, 20X8, that goodwill from its purchase of Gopher shares had been impaired and the correct carrying amount was $2,500. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.
