On January 1, Year 1, Milwaukee Company purchased Minneapolis Company, paying $1,200,000 cash. The fair value of Minneapolis' assets was $1,080,000, and it had liabilities of $100,000. The book value of Minneapolis' assets was $980,000.Required: a) Prepare Milwaukee's journal entry to record the acquisition of Minneapolis Company.b) At the end of Year 3, Milwaukee concluded that the value of its goodwill (associated with the acquisition of Minneapolis) had declined by $30,000. Prepare the journal entry to record this decrease in value.
What will be an ideal response?
a)
| Minneapolis assets | 1,080,000 | ? |
| Goodwill | 220,000 | ? |
| Minneapolis liabilities | ? | 100,000 |
| Cash | ? | 1,200,000 |
| Impairment loss | 30,000 | ? |
| Goodwill | ? | 30,000 |
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