1. Compute the amount of goodwill recognized, if any, on July 31, 2017.

2. Determine the impairment loss, if any, to ne recorded on December 31, 2017.

3. Assume that fair value of the Conchita Divison is $1,714,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded on December 31, 2017.

4. Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement.

On July 31, 2017, Carla Vista Company paid $3,000,000 to acquire all of the common stock of Conchita incorporated, which became a division of Carla Vista Conchita reported the following balance sheet at the time of the acquisition Current assets Noncurrent assets Total assets $710,000 2.700,000 $3.410.000 Current liabilities Long-term liabilities Stockholders equity Total liabilities and stockholders equity $600,000 500,000 2.310,000 $3.410.000 It was determined at the date of the purchase that their value of the identiable net assets of Conchita was $2.700,000. Over the next 6 months of operations, the newly purchased mision experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2017. Conchita reports the following balance sheet information Current assets Noncurrent assets including goodwill recognized in purchasel Current liabilities Long term blities Net assets $410.000 2.530.000 1660,000) 1460,000) $1.820.000 It is determined that the fair value of the Conchita Division is $1.850.000 The recorded amount for Conchitasnet assets excluding good which has a fair value $130.000 above the carrying value is the same as fair value, except for property, plant, and equipment