Acquirer Company bought Servile Company for $5,000,000 on January 2, 2004. The fair market value of the individual net assets was $3,500,000. In succeeding years, the fair market value of Servile€™s costs and goodwill were as follows:

Required:
a. What amount of goodwill should be recognized as a result of the acquisition of Servile in 2004?
b. Determine the amounts of the goodwill write-offs (if any) in 2005, 2006, and 2007.

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Fair Market Cost of Servile's Value of Net Assets and Year Servile 2005 $7,000,000 2006 7,300,000 2007 8,000,000 Goodwill S7,100,000 6,700,000 9,300,000