Any topic (Writer’s Choice)

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LEVON is an online education company. At the end 2018 they acquired their biggest competitor. They started recognizing revenue for the acquisition in 2019 A portion of their income statement appears below:

                                2017                    2018                            2019
Sales                    4096.7                    4885.1                          7401.8
COGS                    2580.9                    3077.6                          5181.3
Operating Income    1515.8                    1807.5                          2220.5
Impairment of Goodwill    0                    0                                  500

Please answer these questions:

Question A. The CEO of LEVON is quite excited about the increase in operating income in 2019 that occurred after their acquisition. Are you as excited as LEVONs CEO? Why or why not?

Question B: What does the impairment of goodwill tell you and how does the impairment of goodwill impact net income?  Explain.

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