In 2020, mowchan inc. acquired sanchez co. and recorded goodwill of $290 million as a result. the net assets (including goodwill) from mowchan’s acquisition of sanchez co. had a 2021 year-end book value of $1,160 million. mowchan assessed the fair value of sanchez at this date to be $1,020 million, while the fair value of all of sanchez’s identifiable tangible and intangible assets (excluding goodwill) was $900 million. the amount of the impairment loss that mowchan would record for goodwill at the end of 2021 is

You are chairman of the board of a successful technology firm. there is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%. your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. one member of the board feels that it is un-american to use various accounting strategies in order to avoid paying taxes. others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. one board member quoted what the ceo of exxon once said: “i’m not a u. s. company and i don’t make decisions based on what’s good for the u. s.” what are the alternatives? what are your recommendations? why do you recommend this course of action?