1. At December 31, 2020, an impairment test is performed on the copyright purchased. The carrying value of the copyright is $ 62,400. It is estimated that the net cash flows to be received from the copyright will be $60,000, and its fair value is $57,000. Compute the amount of impairment, if any, to be recorded on December 31, 2020.

Answer: .

b. On July 1, 2020, Vinson Corporation acquired Carley Company for $900,000 cash. At the time of purchase, Carleys balance sheet showed assets of $775,000 and liabilities of $250,000. The fair value of Carleys assets is estimated to be $950,000.

(1) Compute the amount of goodwill acquired by Vinson.

(2) On December 31, the fair value of Carley is estimated to be $720,000. The carrying value of Carleys net assets, including the goodwill, at year-end is $750,000. Compute the amount of impairment, if any, to be recorded on December 31, 2020.

Answer: (1) ; (2) .