In late July 2020, Grouper Ltd., a private company, paid $2.2 million to acquire all of the net assets of Monty Corp., which then became a division of Grouper. Monty reported the following statement of financial position at the time of acquisition:

Current assets$415,000Current liabilities$300,000Non-current assets1,335,000Long-term liabilities265,000Shareholders' equity1,185,000$1,750,000$1,750,000

It was determined at the date of the purchase that the fair value of the identifiable net assets of Monty was $1.5 million. Over the next six months of operations, the new division had operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, the fair value of the Monty Division is $1,870,000, and the division reports the following statement of financial position information:

Current assets$465,000Non-current assets (including goodwill recognized in purchase)2,300,000Current liabilities(704,000)Long-term liabilities(527,000)Net assets$1,534,000

Assume that Grouper Ltd. prepares financial statements in accordance with ASPE.

Calculate the amount of goodwill, if any, that should be recognized in late July 2020.

Goodwill$

Determine the loss on impairment, if any, to be recognized on December 31, 2020.(If an answer is zero, please enter 0. Do not leave any fields blank.)

Impairment loss$

Assume that the fair value of the Monty Division on December 31, 2020, is $1.3 million. Determine the loss on impairment, if any, that would be recognized.

Impairment loss$

Prepare the journal entry to record the loss on impairment, if any.(Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

Dec. 31, 2020