On July 31, 2017 Cullumber Company paid $2850000 to acquire all of the common stock of conchita incorporated, which became a division of Cullumber. Conchita reported the following balance sheet at the time of the application.

Current assets 740000

Noncurrent assets 2550000

Total assets 3290000

current liabilities 570000

Long-term liabilities 470000

stockholders equity 2250000

total liabilities and stockholders equity 3290000

It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was 2590000. Over the enxt 6 months of Operations, the newly purchased division experienced operating losses. In addition it now appears that it whll generate substantial losses for the foreseeable future. At December 31, 2017, Conchita reports the following balance sheet information.

Current assets 420000

Noncurrent assets (including goodwill recognized in purchase) 2310000

Current liabilities (660000)

Long term liabilities (460000)

Net Assets 1610000

It is determined that tbe fair value of the Conchita Division is $1850000. The recorded amount for the Conchitas net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value $110000 above the carrying value.

a. compute the amount of goodwill recognized, if any on July 31, 2017.

b. determine the impairment loss if any to be recorded on December 31, 2017

c. Assume that fair value of the Conchita Division is $1504000 instead of $1850000. Determine the impairment loss if any to be recorded on December 31, 2017.

d. Prepare the journal entry to record impairment loss is any and indicate where the loss would be reported in the income statement.