On August 31, 2020, XYZ company became a division of ABC company. ABC paid $5,000,000 to acquire all of the company stock for XYZ company. Below is the balance at the date of purchase for XYZ company. Current assets $ Noncurrent assets Total assets 825,000 3,700,000 $ 4,525,000 Current liabilities Long-term liabilities $ 575,000 525,000 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 XYZ 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, 2020, XYZ reports the following balance sheet information. Current assets $ 475,000 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 XYZ is $2,875,000. The recorded amount for XYZ'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, 2020. 2. Determine the impairment loss, if any, to be recorded on December 31, 2020. 3. Assume that fair value of the XYZ is $2,600,000 instead of $2,875,000. Determine the impairment loss, if any, to be recorded on December 31, 2020. 4. Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. loss on impairment Reporting of the impairment loss: Debit Credit What Disclosure is required in the notes to the financial statements, if any for the impairment or goodwill