28) In 2010, Azimuth Company purchased a small business for $500,000. The market value of the business's assets were $850,000, and the market value of the liabilities were $400,000. Azimuth recorded goodwill of $50,000 at time of acquisition. At the end of 2011, they measured the goodwill and found it had a remaining value of only $20,000. Please provide the entry needed at year-end 2011.
Learning Objective 9-6
1) The major ethical issues surrounding the recording of assets have to do with how assets are defined.
2) One of the key concepts surrounding the definition of an asset is that it must provide future benefit.
3) If a company incurs an expense, but treats it as an asset, net income would be understated.
4) Many companies have gotten into trouble by recording costs as expenses, rather than capitalizing them.
5) Which of the following is a common ethical dilemma related to fixed assets?
A) Choosing whether to repair or replace an older asset
B) Choosing whether an asset should be capitalized or expensed
C) Choosing the useful life on an asset