On May 31, 2019, Bass Company paid $3,500,000 to acquire all of the common stock of Grouper Corporation, which became a division of Bass. Groupers balance sheet at the time of the acquisition reported the following:

Current assets $ 900,000 Current liabilities $ 600,000

P, P & E 2,700,000. Long-term liabilities 500,000

Stockholders' equity 2,500,000

Total Assets $3,600,000 Stockholders' equity $3,600,000

It was determined at the date of the purchase that the fair value of the identifiable net assets of Grouper was $2,800,000. The difference between Groupers net book value and this fair value is attributable to Groupers PP&E which appraised at $300,000 above book value.

At December 31, 2019, the Grouper Division has the following balance sheet information:

Current assets $ 800,000

P, P & E and Goodwill recognized in purchase 2,400,000

Current liabilities (700,000)

Long-term liabilities (500,000)

Net assets $2,000,000

Instructions

(a) Compute the amount of goodwill recognized, if any, on May 31, 2019. (

b) At December 31, 2019 the fair value of the Grouper Division is $1,900,000. At this date, the property and equipment has a fair value that is $200,000 higher than the carrying value. Determine the amount of goodwill impairment (if any).