On May 31, 2019, Moon Company paid P3,400,000 to acquire all of the ordinary shares of Mentos Corporation, which became a division of Moon. Mentos reported the following statement of financial position at the time of the acquisition:

Non-current assetsP2,700,000EquityP2,500,000

Current assets900,000Non-current liabilities500,000

Current liabilities600,000

Total assetsP3,600,000Total equity and liabilitiesP3,600,000

It was determined at the date of the purchase that the fair value of the identifiable net assets of Mentos was P2,800,000. At December 31, 2019, Mentos reports the following statement of financial position information:

Current assetsP800,000

Non-current assets (including goodwill recognized in purchase)2,400,000

Current liabilities(700,000)

Non-current liabilities(500,000)

Net assetsP2,000,000

It is determined that the recoverable amount value of the Mentos division is P2,100,000.

Instructions

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

(b)Determine the impairment loss, if any, to be recorded on December 31, 2019.

(c)Assume that the recoverable amount of the Mentos division is P1,800,000 instead of P2,100,000. Prepare the journal entry to record the impairment loss, if any, on December 31, 2019.