Chapter 3
Long-Term Assets
128
AP-14B (
6
)
Turnbull Inc. purchased the assets ($516,800) and liabilities ($407,600) of Chapman Inc. on
May 1, 2016 for a total purchase price of $315,000. Turnbull paid $105,000 in cash and signed
a note payable for the remaining balance. This is an exciting transaction for Turnbull, as it will
be acquiring Chapman’s employees, a very experienced and skilled workforce.
Required
a) Prepare the journal entry for Turnbull to record the purchase.
Date
Account Title and Explanation
Debit
Credit
b) Over the year, a number of key personnel have left the company, and through a review of
its assets on December 31, 2016, Turnbull has noted impairment in goodwill of $23,000.
Record the journal entry to record this impairment to goodwill.
Date
Account Title and Explanation
Debit
Credit
