Leon Corp. purchased Spinks Co. 4 years ago and at that time recorded goodwill of $480,000. The Sinks Division's net assets, including goodwill, have a carrying amount of $1,200,000. The fair value of the division is estimated to be $1,140,000. Comment #1 The fair value of the division ($1,140,000) is less than the carrying amount of its assets ($1,200,000). Therefore, goodwill is impaired so an impairment entry is necessary. Comment #2 Assuming that the fair value of the division is estimated to be $1,200,000 and the implied goodwill is $360,000. The fair value of the division ($1,200,000) is less than the carrying amount of its assets ($1,300,000). Therefore, goodwill is impaired. Loss on Impairment 100,000 Goodwill 100,000 True False