2. Brandt Company pays $1,590,000 to acquire 100% of the common stock of Revolve Incorporated. It assumes that Revolve's plant assets (such as the factory building and land) are undervalued by $41,000. The historical cost of the net assets acquired, excluding goodwill, is equal to $1,505,000. Revolve will be held as a division of Brandt The following information is available 1 year after the acquisition of the subsidiary company (i.e., the reporting unit) (Cick the icon to view the balance sheet.) Brandt estimated the fair (appraisal) value of the division's net assets (excluding goodwill) 1 year after the date of acquisition at $1,605,100 Read the requirements Requirement a. Compute goodwill recorded on the date of acquisition Account Amount $ 1,590,000 Acquisition cost Book value of net assets acquired Excess cost over book value (1,505,000) $ 85,000 (41,000) Revaluation of plant assets 44,000 Goodwill Requirement b. Determine whether goodwill is impaired assuming that the fair value of the Revolve Division with goodwill 1 year after acquisition is equal to $2,003,000. Provide the impairment journal entry, if needed. One-Step Impairment Test Fair value of the reporting unit $ 2,003,000 Book value of the reporting unit $ 1,627,300 Impairment indicated No Prepare the journal entry required to record any impairment loss. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journa entry table and leave all remaining cells in the table blank.) Date of Impairment Account (1) (2) (3) (4) Requirement c. Determine whether goodwill is impaired assuming that the fair value of the Revolve Division with goodwill 1 year after acquisition is equal to $1,617,000. Prepare the impairment journal entry, if needed. One-Step Impairment Test (5) (6) Impairment indicated (7) Prepare the journal entry required to record any impairment loss. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Account Date of Impairment (8) (9) (10) (11) 1: Data Table Debit Credit Description Cash $ 203,000 Inventory Property, plant, and equipment, net Goodwill 306,000 1,475,200 44,000 Current liabilities $ 400,900 Common stock - no par 340,300 Retained earnings 1,287,000 $ Totals 2,028,200 2,028,200 $ 2: Requirements a. Compute goodwill recorded on the date of acquisition. b. Determine whether goodwill is impaired assuming that the fair value of the Revolve Division with goodwill 1 year after acquisition is equal to $2,003,000. Provide the impairment journal entry, if needed. c. Determine whether goodwill is impaired assuming that the fair value of the Revolve Division with goodwill 1 year after acquisition is equal to $1,617,000. Prepare the impairment journal entry, if needed