On January 1, 20X1, Porta Corporation purchased Swick Company’s net assets and assigned goodwill of $80,000 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date:

Required

On December 31, 20X3, Porta must test goodwill for impairment. Determine the amount of goodwill to be reported for Division K and the amount of goodwill impairment to be recognized, if any, if Division K’s fair value is determined to be

a. $340,000.

b. $280,000.

c. $260,000.

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Cash Inventory Equipment Goodwill Accounts Payable Carrying Amount $ 14,000 56,000 170,000 80,000 30,000 Fair Value $ 14,000 71,000 190,000 30,000