On June 31, 2019, Majestic Co. acquired all of the common stock of Golden Company, which became a division of Majestic Co. Golden reported the following statement of financial position acquisition:

Golden Company

Statement of Financial Position

Assets

Equity and Liabilities

Plant assets (net)

$1,250,000

Share capital-ordinary

Inventory

370,000 Retained earnings

Receivables

750,000

Accounts payable

Cash

Total assets

$1,045,000

675,000

350.000

$2.720.000

Total equity and liabilities.

$2.720,000

An appraisal indicated that the fair value of the inventory was $375,000 and the fair value of the plant assets was $1.450,000. The agreed purchase price was $3,000,000, and this amo previous owners of Golden Company.

Required:

a. Prepare the entry to record the purchase of Golden Company.

b. Assume that the carrying amount of Golden Company division's net assets, including goodwill is $2,800,000. The recoverable amount of the division is e Prepare the journal entry to record the impairment loss (If any) on December 31,