Instructions: Use the information below to answer the questions that follow. On August 31, Z company became a division of C company. C paid $5,000,000 to acquire all of the company stock for Z company. Below is the balance at the date of purchase for Z company. $ Current assets Noncurrent assets Total assets 825,000 3,700,000 4,525,000 $ Current liabilities $ 575,000 Long-term liabilities 525,000 Stockholders' equity 3,425,000 Total liabilities and stockholders' equity $ 4,525,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Z company was $4,725,000. Over the next 5 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, Z reports the following balance sheet information. $ 475,000 Current assets Noncurrent assets (including goodwill recognized in purchase) Current liabilities Long-term liabilities Net assets 3,400,000 (700,000) (500,000) $ 2,675,000 It is determined that the fair value of the Z is $2,875,000. The recorded amount for Z's net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value $150,000 above the carrying value. Instructions 1. Compute the amount of goodwill recognized, if any, on August 31. 2. Determine the impairment loss, if any, to be recorded on December 31. 3. Assume that fair value of the Z is $2,600,000 instead of $2,875,000. Determine the impairment loss, if any, to be recorded on December 31. 4. Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. Debit Credit Reporting of the impairment loss: What Disclosure is required in the notes to the financial statements if any for the impairment or goodwill